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62 d Congress, i HOUSE OF REPRESENTATIVES, j Report 
Hd Session. f "j No. 829 . 


REDUCTION OF THE DUTIES ON COTTON MANUFACTURES. 

tfi. 

- / 

June 4, 1912.— Committed to the Committee of the Whole House on the state of the 

Union and ordered to be printed. 

U.S. , 

Mr. Underwood, from the Committee on Ways and Means, 
submitted the following 

REPORT. 

[To accompany H. R. 25034.] 


CONTENTS. 


Page. 

H. R. 12812 reintroduced. 2 

Analysis of Tariff Board’s report: 

Scope of analysis. 3 

Cost of production theory. 3 

Evasion of tariff issue. 4 

Value of report. 4 

Source of cost data. 5 

Use of price figures. 7 

Competitive status as to raw material. 8 

Yarns. 9 

Segregating yarn costs. 11 

Conclusions as to yarns. 12 

Cloth.... 13 

Cotton industry in Japan. 23 

Cost of finishing cloth. 24 

Hosiery and knit goods. 25 

Cost of mill equipment. 29 

Employees in cotton mills. 30 

Question of labor cost. 31 

Criticism of tariff of 1909. 33 

Board criticises mercerization duties. 35 

Prices and the tariff. 35 

Charges against combinations. 37 

Recapitulation. 38 

Revenue and summary under H. R. 25034. 38 

Form and phraseology of the bill. 42 

Appendix: 

The bill (H. R. 25034) and comparative data. 43 





































REDUCTION OF THE DUTIES ON MANUFACTURES OF 

COTTON. 


The Committee on Ways and Means, to whom was referred the bill 
(H. R. 25034) to reduce the duties on cotton manufactures, haying 
had the same under consideration, report it back to the House with¬ 
out amendment and recommend that the bill do pass. 

H. R. 12812 REINTRODUCED. 

The bill H. R. 25034 is identical, except as to date of effectiveness, 
with H. R. 12812, introduced at the first session of the present Con¬ 
gress. During the special session, which convened on April 4, 1911, 
mis committee set itself to the task of revising the textile schedules 
of the tariff act, giving them precedence over all other schedules. 
The discussion and analysis of the tariff act of 1909 throughout the 
country had shown that, defective and objectionable as were the pro¬ 
visions of this entire measure, the rates of duty on manufactures of 
cotton and wool were of all the most unsatisfactory. In the cotton 
schedule particularly there were especially objectionable changes 
introduced while the bill was undergoing revision. This condition 
rendered Schedule I less satisfactory in certain respects than even 
Schedule K, for while Schedule K was, by the act of 1909, maintained 
in the old and obnoxious form given it by the act of 1897, Schedule I 
had been made more objectionable by the so-called revision of 1909 
than it was during the 12 years from 1897 to 1909. 

The bill H. R. 12812 was prepared by the committee last summer 
with great care, having abundant information as to the conditions 
surrounding the manufacture of cotton. Simpler in its organization 
than the wool industry and unhampered by the existence of a duty 
on the raw material, the cotton manufacture has reached higher 
efficiency, and is at the same time less likely to be subject to 
unexpected results from changes in duties than wool manufacture. 
It was under these conditions that H. R. 12812 was framed by the 
committee and was adopted by the House of Representatives. This 
measure received practically no criticism from disinterested sources, 
and was not altered in the Senate, in so far as it applied to cotton 
textiles. President Taft vetoed this bill on August 22, 1911, but 
in so doing expressed himself as objecting chiefly to the provisions 
introduced in the Senate as amendments dealing with other schedules. 
The President assigned as one reason for vetoing the cotton bill last 
summer, the fact that the Tariff Board had not reported on this 
schedule, stating that the report— 

based upon the most thorough investigation, will show the comparative costs of all 
the elements of production in the manufacture of cotton in this and other countries. 

2 

JUfV.TO 191 ? 



P* ■?' L/> 


3 


\ V^^dutdw on cotton manufactures. 


The only change which has occurred in the situation since last sum¬ 
mer is the submission of the Tariff Board report on cotton manufac¬ 
tures, which was transmitted to Congress by the President in his mes¬ 
sage of March 26, 1912. In this message the President said: 


I now recommend that the Congress proceed to a consideration of this schedule with 
a view to its revision and a reduction of its rates * * *. 


This course of action was urged by the committee in its report upon 
H. R. 12812, submitted during the first session of this Congress (H. 
Rept. No. 65, 62d Cong., 1st sess.). The Executive is, therefore, now in 
harmony with the majority Members of this House on the general 
policy to be adopted, in spite of his veto of last summer, and the only 
question remaining is the extent to which the reduction in cotton 
duties should be carried. The President further stated in his mes¬ 
sage transmitting the Tariff Board report on cotton manufactures: 

I can not emphasize too much the importance that I attribute to the work of the 
board. The reports already made by the board are most valuable in advising the Con¬ 
gress and the people of the actual conditions under which these schedules operate. 

Since the President so strongly calls attention to the cotton report 
of the Tariff Board and since this report, as already indicated, is the 
only additional information on the subject that has become available 
since President Taft vetoed H. R. 12812, this committee has made a 
careful analysis of the Tariff Board report in order to ascertain the 
character of the findings and to draw inferences therefrom regarding 
the proper rates of duty. As a result of this analysis, however, noth¬ 
ing of beneficial significance has been found and the committee must 
recommend the enactment of H. R. 25034, which is identical, except 
as to date of effectiveness, with H. R. 12812 of last session. 


ANALYSIS OF TARIFF BOARD’S REPORT-SCOPE OF ANALYSIS. 


The following discussion of the Tariff Board’s report on cotton 
manufactures deals with (1) the theoretical basis upon which the 
report is founded; (2) the character of its data, statistical methods, 
and the qualities which entitle it to confidence, or the reverse; and 
(3) interpretation of the board’s report and the attempt to apply the 
same to the tariff situation. The first of these phases of the dis¬ 
cussion demands no elaborate treatment inasmuch as the ideas in¬ 
volved in it have already been presented by the committee in its 
report on the wool bill,H. R. 22195. (H. Rept. No. 455, 62d Cong., 

2d sess.) 

COST-OF-PRODUCTION THEORY. 

As in the report on wool and manufactures of wool, so in its report 
on cotton manufactures, the board technically accepts the theory 
that the tariff is in some way dependent upon or related to the cost 
of producing the goods, and a considerable portion of the cotton 
report consists of a study of costs of producing cotton yarns and 
fabrics. The investigation of the board was conducted chiefly in the 
United States, although some data purporting to show foreign costs 
are presented in the report. A new element in the form of the analy¬ 
sis of prices has been projected by the board; these and its study of 
trade conditions are both factors in the problem which received no con¬ 
siderable attention in the report on wool and manufactures of wool. 


4 


DUTIES ON COTTON MANUFACTURES. 


This change in method will be considered hereafter. At this point 
it is necessary to note, first, that notwithstanding the shift to the 
price basis of study, the board adheres to the comparative cost of 
production theory as a basis for fixing tariff duties, and the larger 
part of its report consists of an analysis of what is called costs, or 
more correctly stated, money expenses of production. 

In the committee’s report on the wool bill, H. R. 22195 (H. Rept. 
No. 455, 62d Cong., 2d sess.), some familiar economic reasoning was 
reviewed bearing upon the cost of production theory as a regulator 
of tariff duties. What was said in that report applies with equal force 
to the use of the same theory with regard to rates of duty for cotton 
manufactures. The remarks made in that report with reference to 
the abstract basis of the cost of production theory, the relationship 
between prices and costs, variations in costs, the importance of ascer¬ 
taining accurate comparative costs, and the generally futile character 
of this mode of inquiry are applicable to the report of the Tariff 
Board on manufactures of cotton. All that was said on these 
subjects in discussing the report of the Tariff Board on wool and 
manufactures of wool is equally applicable to the report on cotton 
manufactures in so far as the report is based upon the theory of 
comparative costs of production. 

EVASION OF TARIFF ISSUE. 

It was pointed out in House Report No. 455 (62d Cong., 2d sess.) 
that the Tariff Board report on wool was not in reality a tariff docu¬ 
ment. This comment is also applicable to the report on cotton 
manufactures, though the latter contains much more material than 
the former concerning rates of duty and the method by which they 
have been levied. However, nowhere in the report is there any 
recommendation as to the proper course to be pursued in adjusting 
the tariff, the reader being left to draw his own conclusions as to this 
from the data presented. As in the report on wool, the board has 
nothing to say respecting the duties as affecting capital or labor, the 
profits of the manufacturing concerns engaged in the industry, and 
practically nothing relative to the general influence of the present 
tariff on the status of the industry. The Tariff Board report, now 
before Congress, consists of two parts. One part contains the Presi¬ 
dent’s message, letter of submittal, summary of findings, and a so- 
called “glossary,” in which are given definitions of the terms used in 
tariff legislation; matter relative to production, importation, con¬ 
sumption, and processes of manufacture in the United States and in 
other countries. The other part consists of a study of the relative 
costs of production, prices, and wages for the cotton industry. The 
board adds that this investigation has been conducted “with special 
reference to the existing rates of duty,” a description not fully borne 
out by a careful examination of the text. 

VALUE OF REPORT. 

Part 1 will be of service to the public in explaining the terminology 
of the tariff and the significance of the existing rates. It contains 
little that was not already available to any Member of Congress who 


DUTIES ON COTTON MANUFACTURES. 5 

chose to avail himself of the facilities at hand. It is essentially a 
clerical or library compilation from printed sources, and as such 
affords little of service to the practical legislator other than its con¬ 
venient form. Much of the material has been given in an even more 
complete manner in the report of the Ways and Means Committee to 
accompany H. R. 12812 (H. Rept. No. 65, 62d Cong., 1st sess.). A 
considerable portion of the board’s report has been prepared by draw¬ 
ing upon technical works relating to cotton manufactures. ~ Part 2 
deals with the cost of producing cotton yarn in the United States 
and in England, and the cost of producing fabrics in these coun¬ 
tries. It includes a study of the cost of finishing cloth and putting 
it through different processes, such as bleaching, dyeing, mercerizing, 
and the like. It also includes a study of cotton-mill efficiency, the 
wages of employees in the industry, and a section is devoted to knit 
goods. Detailed figures are given in the appendices, but considera¬ 
tion of these appendices may be omitted in view of the fact that they 
supply merely the material upon which the board has drawn in pre¬ 
senting its general discussion. The portion of the report which 
should receive attention is found on pages 349 to 666. A consider¬ 
able portion of the material, even in this part of the report, consists 
of figures that are not required for the discussion. Much of the 
material has practically been covered in another form in the reports 
on the cotton industry made during the last two years by the Immi¬ 
gration Commission and by the Bureau of Labor. The total amount 
of data, therefore, comprised within the pages named must be mate¬ 
rially cut down, if one desires to ascertain the exact scope of the 
report which is new and worthy of detailed study at this time. 

SOURCE OF COST DATA. 

The Tariff Board is specific in furnishing the names of the American 
mills from which data were obtained during the cotton investigation, 
and notwithstanding that these data are presented in a way not to 
involve publishing the facts as to any particular mill (each mill being 
referred to by a number, so that identification of the data would be 
impossible), yet the board has failed to furnish similar information 
with reference to the alleged costs it obtained from mills in England. 
The board presents alleged costs for seven different yarn manufac¬ 
turing plants in the Lancashire district, the mills being numbered from 
1 to 8, and the data being presented according to the mills as thus 
numbered. Having been officially requested by the Ways and Means 
Committee for the names of the mills thus considered in England on 
the same basis as given for the United States, the Tariff Board has 
declined to comply with the request. This is on the stated ground 
that the information from abroad was obtained under seal of confi¬ 
dence and in a way that prohibits the board from making the facts 
known in any manner that would result in publicity. The absence of 
any statement in the report concerning the methods that were adopted 
in getting the costs from these mills naturally raises a question as to 
whether they were obtained in the same manner as in the United 
States. In response to an inquiry addressed by the chairman of the 
Ways and Means Committee to the chairman of the Tariff Board, 


6 


DUTIES ON COTTON MANUFACTUKES. 


Chairman Emery does not state that the English mill costs were 
obtained by the agents of the board. His language is: 

The manufacturing costs of yarn in the English mills were taken directly from the 
books of the mills by sworn chartered accountants and checked by another set of 
sworn chartered accountants. 

Who the chartered accountants referred to were and whether they 
were or were not in the employ of the board is not indicated, but the 
inference may be that none of them were employed by the board and 
that the figures which are offered as representing costs in the English 
mills were not obtained directly from the books by persons over whom 
the board had control. 

In his reply to the letter of the chairman of the Ways and Means 
Committee, Chairman Emery continues his explanation of the way in 
which these data were computed, as follows: 

The cost figures secured by these chartered accountants for a complete year’s oper¬ 
ation were transferred to our schedule forms as used for American mills, except that 
productive and nonproductive labor, which are given separately for the American 
mills, were combined under one head-“ labor ”—in the English mills. 

Apparently, therefore, the schedules were not filled out directly 
from the mill books, and it is thus obvious that serious doubt exists 
as to the nature of the yarn cost figures which are said to have been 
obtained in England by the Tariff Board. Should, however, these 
costs be accepted as correct, their comparability is open to the follow¬ 
ing objections: 

1. The board does not state the year to which the data for England 
relate, nor does it advise whether that year was identical with the 
year for which information was obtained from American mills. 

2. The board fails to state whether the mills in England were run¬ 
ning full time; or, if not, whether the data were reduced to a basis of 
full-time operation; or whether the hours during which those mills 
worked were comparable with the operation of the selected mills in 
the United States. 

3. The fact that the board states that the figures for the English 
mills did not distinguish between productive and nonproductive 
labor, as was done in the American mills, introduces a distinct element 
of noncomparability into the returns. 

4. The mills in the United States from which the yarn costs were 
obtained appear to have been mills that were engaged both in spin¬ 
ning and weaving. This was not the case with the English mills, 
which it is understood were devoted to yarn production exclusively. 

Inasmuch as the English cost computations shown are worked out 
to four decimal places, and as a variation in any one of the points 
above enumerated would very largely affect a computation nomi¬ 
nally so close as this, it must be admitted that the data are not enti¬ 
tled to the credence as a basis for the ascertainment of comparative 
yarn costs in the two countries which the board apparently reposes 
in them. Since these costs are the only ones given in the report 
that profess to have been obtained direct from books, the conclusion 
is inevitable that the report does not afford any data whatever on 
actual costs in foreign countries, certainly none that has been obtained 
upon a basis identical with, or even closely similar to, that which was 
adopted in the United States. It is, therefore, impossible to accept 
as final the conclusions of the board on this subject. 


DUTIES ON COTTON MANUFACTURES. 


7 


With reference to the source of information for the cloth costs, it 
appears, that the board has followed the sample method adopted by 
it in the wool report—that is to say, it has taken selected cloth sam¬ 
ples and obtained figures from representative makers with reference 
to the cost of producing cloths of the kinds indicated. These costs 
were obtained by representatives of the board from the mills visited 
in connection with the general cost investigation. In the case of 
every mill investigated all the costs incurred in the production of 
its products were noted. The costs of the cloths were worked out, 
as explained in the report of the board, independently of the mill’s 
own figures. Granting that the data thus obtained were the best that 
could be secured under the sample method, it does not appear that 
any considerable value should be assigned to them. Experience 
shows that such estimates of costs on samples are seldom satisfac¬ 
tory, and the board’s report itself indicates how misleading they 
must have been for any tariff purpose, since in the cost of many 
samples a low and high cost is stated, the variation between the 
two being in many instances very wide. 

It may be said that this variation corresponds to the actual varia¬ 
tion of costs found in mills of different efficiency, but there is no 
authority for asserting that this is the case, since the variation may 
quite as easily arise from the circumstances under which the given 
mills were being operated; that is, whether on full time or part time, 
and whether with efficient or inefficient machinery. Unless it were 
known to what mills the costs thus afforded relate, it would be out of 
the question to regard them as accurately indicating actual costs 
of manufacture in the United States. Still less could such costs for 
foreign countries be regarded as trustworthy. For these reasons, 
therefore, the authority upon which the cost data on cloths were 
secured must be regarded as exceedingly unsatisfactory, and hence 
the conclusions based on them must be rejected or treated with great 
caution. 

USE OF PRICE FIGURES. 

It should, moreover, be noted in examining the cotton report of the 
Tariff Board that the bo.ard has made a marked departure from the 
methods employed in the wool report. In the latter the discussion 
was primarily based upon supposed cost figures which had been ob¬ 
tained from selected mills or which had been secured with reference to 
chosen samples of cloth. The theory acted upon was that the proper 
rate of duty to be levied upon a given article could be determined by 
ascertaining the cost of production of that article at home and abroad 
and computing the difference as a percentage on the foreign money 
costs thus stated. 

In the cotton investigation the board recognized that the data 
with reference to costs are insufficient and that it would be impossible 
to base findings upon these cost returns. Hence, recourse is had 
to price figures to establish the relative position of various countries 
with reference to competition in specified products. As the board 
expresses it (p. 11): 

For tariff purposes, however, valuable conclusions may be drawn from a com¬ 
parison of relative prices under competitive conditions in this and other countries 
and from a comparison of duties with domestic production costs. 


8 


DUTIES ON COTTON MANUFACTURES. 


This means that since, as the board states it (p. 11)— 

in the matter of turning yarn into woven fabrics the board was unable to secure such 
detailed foreign-cost figures as in the case of spinning— 

it has been obliged to abandon the cost idea entirely, and “for tariff 
purposes’’ it draws its conclusions by comparing prices under 
competitive conditions and by ascertaining the relationship between 
rates of duty and domestic costs of production. This method 
has always been employed by careful legislative committees in 
dealing with the tariff. "These committees have sought to secure 
data with reference to prices through official sources and by the aid 
of special agents. They, moreover, have sought to obtain facts as 
to domestic costs by interrogating manufacturers and by obtaining, 
from the latter, estimates with reference to the sums for which they 
could produce given articles of manufacture under existing conditions; 
then on the strength of these data the effort has been to make the 
proper adjustment of duties. 

In accepting this same plan the Tariff Board has practically aban¬ 
doned the object for which President Taft stated it had been created, 
namely, to ascertain the cost of production at home and abroad, and 
consequently the amount of tariff duty required to place the domestic 
producer on an equal competitive basis with the foreigner and at 
the same time afford the American manufacturer a reasonable profit. 
The question presented then in determining the value of the board’s 
report as compared with what has been done on the same subject 
on former occasions, is whether the board has obtained more and 
better price data than were obtained by committees of Congress, 
working independently. The fact remains that the board has made 
a wide departure from the theory upon which its former reports have 
been prepared, and in examining the cotton report care should be 
taken to segregate those conclusions which are based upon its new 
method of investigation from those arising from the use of the old 
cost of production plan. 

COMPETITIVE STATUS AS TO RAW MATERIAL. 

Little or nothing need be said of the position of the cotton industry 
with regard to raw material in the United States and in foreign 
countries. In this respect the problem of the cotton industry is very 
widely at variance with that discovered in the wool and woolen inves¬ 
tigation. There is no duty on raw cotton in the United States and 
none in England, the latter country being, as the board points out, 
our principal competitor. As the board plainly states (p. 8): 

In the cost of raw material there is practically no advantage possessed by either 
country. Any general difference in price between England and the United States 
is less than occurs from mill to mill or month to month in either country. 

That being true, England, our principal competitor, may be taken 
as having substantially as favorable access to raw material as the 
United States—both countries being regarded in their entireties; 
special cases where an advantage of location exists, as in the case of 
our southern cotton mills, being neglected. 


DUTIES ON COTTON MANUFACTURES. 


9 


YARNS. 

The fundamental work done by the Tariff Board in connection with 
the limited analysis of cost of production in the United States and in 
England, undertaken by it in its report, is found in the section deal¬ 
ing with comparison of conversion costs of warp and filling yarns as 
found in various mills in England and the United States. Yarn is the 
first step away from the raw material and toward the finished product. 
The conversion costs which the board studied are those which it took 
from 7 English yarn mills. The 7 English mills are compared with 
28 American mills. “For this comparison/’ says the board (p. 415), 
“we have selected warp yarns Nos. 28, 30, 36, 40, and 50, and 
filling yarns Nos. 26, 36, 38, 40, 50, 60, and 70. The costs on each 
count of yarn is given as found in 4 or more of 7 English mule spin¬ 
ning mills and in 2 or more of 28 American mills for which com¬ 
parable data were secured.” The question may arise at the outset 
why these particular English mills were selected for representative 
costs. 

On this point unfortunately the board furnishes no information, 
thereby subjecting its report to the same character of criticism to 
which the wool report was liable. In fact, the board even admits 
that the basis thus taken for the study of comparative costs in yarn 
mills was not satisfactory. It points out that the English mills 
vary in size from 80,000 to 120,000 spindles each, while the Ameri¬ 
can mills vary from 25,000 to over 500,000 spindles. All the 
English mills were in Lancashire, and therefore only a short distance 
apart; they pay wages that are more or less standardized and are 
subject to the same general conditions as to proximity to fuel, to 
raw materials, to selling markets, etc. The American mills are 
scattered over an extensive area of country, have no standard of 
wages, and work under very diverse conditions. The seven Eng¬ 
lish mills are all modern and well equipped, while many of the 
American mills are old, one being equipped with spinning and 
weaving machinery 60 years old. This evidently did not prove a 
satisfactory basis for the study of comparative costs, inasmuch as 
there was no selection of mills in either country with a view to the 
choice of establishments which could fairly be placed upon the same 
footing of industrial efficiency. It is not surprising therefore to 
find very wide variations in costs in the different mills. In Table 127 
(p. 418), which gives the ring-spun yarn conversion cost in American 
mills, it appears that the cost of 26’s ran from $0.026438 to $0.047417 
per pound. 

Here is a cost variation between mills of nearly 80 per cent. In 
the case of the finer yarns like variations are observable. No. 40 
yarn ranged from $0.045110 to $0.074911 per pound, a variation in 
cost of about two-thirds. The same is true of other mills, which vary 
widely in the different districts of the United States. The board 
remarks (p. 419) that “the most striking feature about the costs given 
for the English mills is the very small range of costs for each number of 
yarn as compared with that found in the case of the American mills.” 
The range in conversion cost was about 13 per cent in the case of all 
yarns for which cost data were secured in England. Bearing this 
point in mind, it is not difficult to account for the variation in con- 


10 


DUTIES ON COTTON MANUFACTUKES. 


version cost between the United States and England. There is no 
reason why the cost in the two countries should show any consider¬ 
able degree of correspondence; and the board itself apparently recog¬ 
nizes this, inasmuch as in the table on page 409 it undertakes to present 
only the comparison of costs calculated for the most efficient American 
mill and the most efficient English mill for which data were available. 
The difference in costs is thus based upon the difference existing be¬ 
tween the two most efficient mills of which the board had knowledge, 
one being in England and the other in the United States. 

This would be much more satisfactory if there were information as 
to how efficient the mill selected in each country as the basis of com¬ 
parison actually was as compared with other mills in the same 
country. But, as already noted, there is no way of ascertaining 
such facts from the board’s report. It can not be known whether 
the seven or eight mills studied in England were more or less efficient 
than the average, unless it be stated how these mills were chosen by 
the board, nor can any conclusions be reached as to the judgment 
shown in obtaining representative mill costs. This, as already seen, 
applies with special force to the study of average costs, but it also 
applies in the same way to the comparison of costs at the most 
efficient mill chosen in either country. The board finds, on the basis 
of these comparisons, that the difference in conversion costs between 
the two countries as expressed in the form of a percentage of the 
English manufacturing cost in no case runs higher than 12 per cent. 
The board goes on to say (p. 423): 

It would be improper to give a difference based on the average costs for the mills 
in each country, since in the English mills are not included the highest-cost mills of 
England, but only a group of uniformly efficient mills, while an average of the figures 
for the United States would be, in some cases, made misleading by the inclusion of 
a disproportionate number of old mills operating at high cost. 

It would appear, therefore, that the board practically accepts the 
idea that tariff duties should be based upon the difference in cost 
between the most efficient mills in the United States and Great 
Britain. But this, obviously, is a view which has not been worked 
out in practice, unless it be true that the mills selected by the board 
in Great Britain are the most efficient mills existing in that country, 
a statement which is not even remotely substantiated. 

From the foregoing review of the board’s figures, it is seen that the 
whole comparison between the yarn costs in the United States and 
Great Britain is based upon comparisons between two groups of 
mills, one in the United States including a variety of mills, the other 
in England, including a small number of mills, and all said to be of 
high efficiency. This is simmered down to a comparison of costs 
in the most efficient mills shown for each country; and between these 
there is a difference in total conversion cost of cotton into yarn of 
less than 12 per cent of the total foreign cost expense (p. 423). 
It is important to note the extreme slenderness upon which this cost 
comparison is based, inasmuch as this basis is used by the board for 
the purpose of building up a large structure of cost comparisons for 
which no figures are available. The board says (p. 423): 

.Comparison can be made between mills of any grade of efficiency from the detailed 
figures of English and American costs given below, and making the proper allowance 
for the additional 89 per cent to be added to labor and 34 per cent to works expense to 
allow for cost of spooling, reeling, and packing. Thus it is possible to compare the 


DUTIES ON COTTON MANUFACTURES. 


11 


difference between the highest-cost mill in England and the highest-cost mill in the 
United States, or the lowest-cost mill in England with the highest-cost mill in the 
United States, and so on. 

Agaip the board says (p. 425): 

Since the general ratio of the English costs to the American costs in yarn making 
has already been shown, an interesting comparison can be made between the duty 
on these yarns and the total conversion cost in the United States. It is obviously 
true that if the purpose is to compare duties with the difference in the cost of pro¬ 
duction here and abroad, this comparison can be made if we have the general ratio 
of foreign conversion costs to the domestic, and the ratio of the duty to the domestic 
conversion cost. * * * Thus jf the English conversion cost is 50 per cent of the 
American conversion cost, then a duty which is 50 per cent of the American cost 
would offset the difference in cost of production. Or, if the English cost is 70 per 
cent of the American cost, this difference would then be offset by a duty which is 
30 per cent of the American cost. 

This appears to be an effort to establish a general cost relationship 
between the many kinds of yarn manufacture based upon the cost 
relationship which has been established for the yarns produced in 
certain specified mills. Of course this could be true only in the event 
that there was the same general relationship between various classes of 
mills in regard to their production. There is no basis whatever for 
any such assumption. 

SEGREGATING YARN COSTS. 

In its analysis of the cost of production of yarns the board under¬ 
takes to show the costs of a great variety of yarns of various numbers 
(pp. 398-426). When it comes to a discussion of cotton manufac¬ 
turing in England, it seeks to present the detailed costs for the vari¬ 
ous numbers of yarns on a comparative basis. Before accepting any 
of these figures it is necessary to inquire how the segregation of costs 
between the different numbers of yarns was made. This point is met 
on page 377 of the board’s report, where the board described the 
methods followed in the investigation. Of this it simply says: 

The next question requiring explanation is 8, yarns produced. The total quan¬ 
tity of yarn produced during the period under investigation was taken, giving the 
quantity of each number (size) yarn, whether warp or filling, and the selling value, 
if the yarn was produced for sale. 

This does not afford any information as to how the segregation of 
costs was made, and the board goes on as follows: 

With these data at hand the agents were in a position to ascertain accurately for 
themselves the cost of each kind of yarn rather than to merely accept the companies’ 
own estimates of their costs. In cases where the pay of the employees engaged in the 
production of roving and of yarn was at a piece rate—that is, so much per hank of a 
given size of yarn—the direct labor cost of turning out a pound of every kind of yarn 
produced by the mill can be readily computed. In most mills, however, drawing- 
frame tenders and spinners are paid, not by the hank, but per side, a side of a spinning 
frame having anywhere from 152 to 240 spindles, and the spinner tends a certain 
number of sides. Nor is there always an accurate record kept of the output of each 
employee from week to week. A common practice in cotton mills is to estimate the 
cost of spinning on a so-called average number basis. 

Then the board enters upon a further explanation as to why these 
methods of computation are not satisfactory and the description of 
the processes which it employed in apportioning costs among the 


12 


DUTIES ON COTTON MANUFACTURES. 


different numbers of yarn. Of this it is sufficient to say that according 
to the board’s own statements the method used by it in the process of 
computation is not that which is commonly employed in cotton mills, 
while the process of computation actually followed by the board is 
open to very severe criticism at several points; for example, the 
method of distributing works expense and fixed charges is apparently 
a machine-rate basis, the fixed charges being divided upon the assump¬ 
tion that the output of yarn per spindle may be taken as fairly indicat¬ 
ing the relative proportion of the fixed charges which it ought to bear 
or which should be apportioned to it. 

There is no positive warrant for such a method of computation 
and the adoption of it renders practically impossible a direct com¬ 
parison with conditions in England, because of the difference in the 
systems of spinning employed. Moreover, the character of the mills 
studied in the United States varies greatly and was by no means 
analogous to that of the English yarn mills examined. For this and 
other similar reasons no confidence whatever can be placed in the 
United States costs of the different yarns as stated by the Tariff Board, 
while still less confidence can be placed in any comparisons between 
the costs of such yarns in the United States and the costs of similar 
yarns in England. 


CONCLUSIONS AS TO YARNS. 

From the analysis of comparative yarn costs for England and the 
United States as set forth by the board it may be concluded: 

1. Comparing the most efficient mills in the United States and in 
Great Britain, the total conversion cost of yarn in England varied 
from 65 to 79 per cent of the American conversion cost (p. 9). 

2. The cost of manufacturing yarn in an English mill is 72 per cent 
of the cost exclusive of material in an American mill (p. 9). 

3. There are greater cost variations on a given number of yard 
in certain mills of the United States than exist between given mills 
in the two countries. 

4. In the case of nearly all yarns given there were domestic mills 
whose highest conversion cost was from 50 to 100 per cent greater than 
the lowest conversion cost. 

5. The poorer mills in the United States are in much greater need 
of protection against the more efficient mills in this country than 
are our mills against the mills of Great Britain. 

6. The difference in conversion costs between the two countries 
varies from 3.8 per cent to 11.9 per cent of the total cost of produc¬ 
tion in England, including raw material (p. 9). 

Table 1 shows yarn costs in the United States and England, to¬ 
gether with the ad valorem rate of duty necessary to equalize differ¬ 
ences in costs. 


DUTIES ON COTTON MANUFACTURES. 


13 


Table 1 . —Comparative summary showing yarn costs per pound (conversion and material) 
in the United States and England , together with the ad valorem rate of duty necessary to 
equalize differences in costs. 


[Tariff Board Report, p. 423.] 




Cost (material and conversion). 

Ad valorem 
rate necessary 


Yarn (No.). 

United 

States. 

England. 

Difference. 

to equalize 
differences 
in costs 
(percent). 

Warp: 

30. 

$0. 2512 
. 3271 

$0.2299 
. 2962 

$0.0213 
.0309 

9. 27 

40. 

10. 43 

50. 

.3590 

.3163 

.0427 

13. 50 

Filling: 

30. 

.2425 

.2297 

.0128 

5.57 

40. 

.3153 

. 2952 

.0201 

6. 81 

50. 

. 3428 

.3146 

.0282 

8.96 

60.. 

.3793 

.3454 

.0339 

9.81 

70. 

.4131 

.3714 

.0417 

11.23 



This table shows that a duty of from about 5J to 13J per cent on 
yarns, based upon the cost of production abroad, would be sufficient to 
compensate for any alleged advantage enjoyed by English mills over 
our own. In the case of the English mills producing at the greatest 
advantage, a duty of 13^ per cent would be sufficient to offset their 
superiority in competition with ourselves. This may be regarded as 
the maximum duty that, on the cost of production theory, could 
possibly be demanded. It shows the amount necessary to “equalize” 
costs in the two countries, assuming that the English producer was 
not called upon to pay any freight, insurance, brokerage charges, or 
selling charges, but laid his yarns down in the American market with¬ 
out any of these expenses. 

The next step in the process of manufacture is that of converting 
cotton yarns into plain fabrics. 


CLOTH. 

In dealing with cloth the board frankly acknowledges that it has 
no data from which to show actual costs. In the first place, the 
board obtained no mill costs on cloths abroad. Secondly, it was 
found that costs are computed abroad in a way different from that 
which is followed in the United States. For these and other reasons, 
therefore, no actual costs are supplied from book records. In com¬ 
puting the supposed costs the board has had recourse to the same 
method of ascertaining costs by estimates on samples as was pursued 
in the report on wool and manufactures thereof. It took 100 samples 
of American cloths and submitted them to domestic manufacturers for 
cost estimates. Then these samples were apparently submitted to Eng¬ 
lish manufacturers, who quoted prices at which they would manufacture 
and deliver goods of the same kind. It is clear that this method of pro¬ 
cedure has the same defects as noted in the board’s study of woolens 
through samples. The so-called foreign costs were not costs at all, 
but were quoted figures submitted by foreigners who frequently had 
never made these cloths and who probably did not expect to make 
them, since in many cases the duties established under existing laws 
are very nearly prohibitory, while the given class of goods, perhaps, 
is not manufactured for use elsewhere than in the United States. 


















14 


DUTIES ON COTTON MANUFACTURES. 


The bases of comparison, therefore, with reference to these cloths 
are alleged actual costs at the mills making the sample, while the com¬ 
parison with conditions in England is entirely conjectural. In order 
to get a more accurate basis of comparison, the board suggests taking 
the home selling prices on these same fabrics as the basis for showing 
what the duty should be if such goods were imported. Thus is intro¬ 
duced a new element of inaccuracy, inasmuch as costs at home would 
be compared with selling prices abroad. It would be better to 
abandon the cost system entirely and to take selling prices in the 
United States for the purpose of comparison with selling prices 
abroad. The basis of comparison suggested was, of course, exceed¬ 
ingly favorable to the American manufacturer, inasmuch as the tacit 
assumption in the study made by the board along the lines thus 
indicated was manifestly that the American manufacturer would be 
willing to sell on a basis of cost of production if necessary, while the 
amount of duty is figured not upon the basis of the English costs 
but upon the basis of English selling prices. 

The amount of the actual duty thus figured would give a much 
smaller percentage than it would if the duty were figured as the 
percentage of reported English costs while, as already stated, it 
would be a preferable basis of comparison if American selling prices 
were contrasted with those of England, and if the amount for which 
the latter were willing to land goods in the United States were ascer¬ 
tained and contrasted with our selling prices studied in the light of 
the dividend record of the mills which provided them. Upon any 
other basis it is evident that a decided element of misinterpretation 
is introduced into the comparison. 

The following table shows the cost in the United States of eight 
samples of cotton cloth containing yarn, the highest number of which 
exceeds No. 100, together with the producer’s selling price per linear 
yard for the United States and England: 


Table 2. —Comparative summary of costs of production for specified cloth samples in the 
United States and producers ’ selling prices in the United States and England , together 
with the ad valorem rate of duty necessary to equalize differences in prices. 


[Table 137 and pp. 563-564, Tariff Board Report.] 


Cotton cloth 
containing 
yam the 
highest num¬ 
ber of which 
exceeds 
No. 100. 
<Sample No.) 

Kind of cloth. 

Finish. 

High or 
low cost. 

19. 

Persian lawn. 

Bleached 

/Low. 

(High. 

34. 

Fancy white goods. 

Striped voile. 

.do. 

Bleached and 
mercerized, 
.do 


35. 

Ho 

36. 

Marquisette. 


48. 

Printed lawn 

Mercer i z e d , 
bleached, 
and printed. 

Bleached and 
printed. 

.do 

1 ..do. 

[High. 

50. 

Organdy. 

57. 

Fancy dimity. 

(in 






United States cost per 
square yard (finished). 


Labor. 

Total. 

Per cent 
of labor to 
total cost. 

$0.0255 

$0.0697 

36.59 

.0328 

.0789 

41.57 

.0454 

.1217 

37.30 

.0277 

.1553 

17.84 

.0232 

.1071 

21.66 

.0191 

.0788 

24.24 

.0307 

. 0863 

35.57 

.0282 

.0864 

32.64 

.0405 

.1087 

37.26 





































DUTIES ON COTTON MANUFACTURES. 


15 


Table 2. —Comparative summary of costs of production for specified cloth samples in the 
United States and producers' selling prices in the United States and England, together 
with the ad valorem rate of duty necessary to equalize differences in prices —Contd. 


Cotton cloth 
containing 
yam the 
highest num¬ 
ber of which 
exceeds 
No. 100. 
(Sample No.) 

Kind of cloth. 

Finish. 

High or 
low cost. 

Producers’ selling price per 
linear yard. 

Ad valorem 
rate neces¬ 
sary to 
equalize 
differences 
in prices 
(per cent). 

United 

States. 

England. 

Differ¬ 

ence. 

19. 

Persian lawn_ 

Bleached 

/Low.... 
\High.... 
Low.... 

. ..do_ 

.do .. 

| $0.0900 
.1850 
.1400 

.1450 

J .1050 
.1050 

.1250 

$0.0847 

.1544 

.1099 

.1286 

.0836 

$0.0053 

.0306 

.0301 

.0164 

.0214 

6.26 

19.82 

27.39 

12.75 

25.60 

34. 

Fancy white goods. 
Striped voile. 

.do. 

Bleached and 
mercerized. 
.do. 

35. 

36. 

Marquisette. 

48. 

Printed lawn.. 

Mercer i z e d , 
blea c h e d , 
and printed. 
Bleached and 
printed. 

.do. 

l.-do_ 

j High.... 
Low.... 

...do.... 

60. 

Organdy. 

67. 

Fancy dimity. 

.0887 

.0363 

40.92 






The number designating each sample shown in column 1 corresponds 
to the number in the Tariff Board’s 100 cloth samples. In the 
column headed “Difference” is exhibited the difference in the producers’ 
selling prices in the United States and England. In the last column 
is shown for each sample the ad valorem rate necessary to equal the 
difference in the prices between the two countries computed on the 
basis of the English prices. It will be observed that although the cost 
is furnished for the United States it is not presented in the same man¬ 
ner for English mills, and the only comparison possible is between 
the producers’ selling prices in the two countries. The cost figures 
serve no purpose, therefore, except as a check upon the selling prices 
and to show the supposed margin realized by the producer over the 
cost of the goods. It will be observed that in one instance the cost of 
production in the United States exceeds the selling price, but in the 
other instances it is well below. 

This means that on the assumption that the board’s figures are cor¬ 
rect, the duty indicated in the table will be necessary to place the 
American producer on an equal market basis with his English com¬ 
petitor. The ad valorem equivalent thus figured ranges from 6.26 
to 40.92 per cent. No allowance is made for the duty on the yarn 
of which the cloth is made, because the difference is based on selling 
prices, which must cover every element of cost in the fabric. The 
computations make no allowance whatever to the English producer 
for freight, insurance, and customhouse and marketing charges. 
With the exception of sample 57, the highest ad valorem rate indi¬ 
cated in the table is 27.39 per cent. In paragraph 3 of H. R. 25034, 
a duty of 30 per cent is fixed on similar cotton cloth containing yarn 
the highest number which shall exceed No. 100. 





























16 


DUTIES ON COTTON MANUFACTURES. 


The following table shows the selling prices of certain plain cloths 
for which 46 quotations are presented by the board, both for the 
United States and for England. 


Table 3. —Comparison of selling prices of plain cloths in United States and England. 

[Tariff Board Report, pp. 451, 452.] 


Kind of cloth. 

Paragraph 
of tariff 
act, 1909. 

Selling 

United 

States. 

price per linear 

England. 

yard. 

Difference. 

Ad valorem 
rate necessary 
to equalize 
differences in 
prices. 







Per cent. 

Plain widp.s 

315 

$0. 037500 

80.0397 

+80.0022 




.035000 

.0367 

+ 

.0017 




.041250 

.0446 

+ 

00335 




.076250 

.0797 

+ 

00345 


Shootings 

315 

.058750 

.0596 

+ 

00085 




.048750 

.0509 

+ 

.00215 




.043750 

. 0454 

+ 

00165 




.085000 

.0880 

+ 

00300 




.040000 

.0418 

+ 

00180 




.082500 

.0844 

4- 

00190 




.061250 

.0645 

+ 

.00325 


Plain narrows 

316 

. 025625 

.0278 

+ 

002175 




. 036250 

.0406 

+ 

0C4350 




. 033125 

.0385 

+ 

005375 




. 035000 

. 0395 

+ 

004500 




. 028750 

.0222 

— 

006550 

29.50 



. 035000 

. 0371 

+ 

002100 


Plain wides. 

316 

.058750 

.0568 

— 

001950 

3.43 



.048125 

.0529 

+ 

004775 




. 050000 

.0547 

+ 

001700 




. 047500 

.0509 

+ 

003400 




. 042500 

.0472 

+ 

004700 




.041250 

. 0450 

. + 

003750 




.055000 

.0608 

' + 

005800 




.038750 

.0418 


003050 


Sheetings... 

316 

.040000 

.0422 

+ 

002200 




.070000 

.0728' 

+ 

002800 




.060000 

.0625 

+ 

002500 




.053750 

. 0554 

+ 

001650 




.058750 

. 0608 

+ 

002050 




.081250 

.0815 

+ 

000250 




. 067500 

.0698 

+ 

002300 




. 062500 

.0661 

+ 

003600 


Plain wides. 

317 

.068700 

.0651 

— 

003600 

5.53 



.083750 

.0781 

— 

005650 

7.23 

Sateens. 

317 

.050000 

. 0529 

+ 

002900 




.066250 

.0667 

+ 

000450 




.053750 

.0560 

+ 

002250 




.071250 

.0716 

+ 

000350 




.065000 

.0641 

— 

000900 

1.40 



.080000 

.0817 

+ 

001700 




. 071250 

.0742 

+ 

002950 




.068750 

.0712 

+ 

002450 




. 073750 

.0787 

+ 

004950 


Do. 

318 

. 095000 

.0896 

— 

005400 

6.03 



. 096250 

.0935 

— 

002750 

2.94 


In 39 instances the English selling price shown in this table is 
higher than the American, while in 7 cases the American is higher. 
Confining attention to the 7 samples in which the American selling 
price was higher than England, it is seen that the ad valorem rates 
necessary to equalize the difference, computed as heretofore, varies 
from 1.40 to 29.50 per cent. With the exception of the one instance 
of 29.50 per cent, no quotation is higher than 7.23 per cent. 






























































Table 4. —Comparative summary of the costs of production of specified cloths for the United States with producers ’ selling price in the United States and 

in England, together with the ad valorem rate of duty necessary to equalize differences in prices. 

[Tables 137 and 171, pp. 444 and 563, Tariff Board Report.] 


DUTIES ON COTTON MANUFACTURES. 


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Table 4. —Comparative summary of the costs of production of specified cloths for the United States with producers 1 selling price in the United States and 
in England, together with the ad valorem rate of duty necessary to equalize differences in prices— Continued. 


18 


DUTIES ON COTTON MANUFACTURES. 


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Table 4.— Comparative summary of the costs of production of specified cloths for the United States with producers' selling price in the United Stales and 
in England, together with the ad valorem rate of duty necessary to equalize differences in prices —Continued. 


20 


DUTIES ON COTTON MANUFACTURES. 






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i Woven of dyed yarn and finished in plant where manufactured. 2 French selling price. 













































































































DUTIES ON COTTON MANUFACTURES. 


21 


This table is divided into two classes corresponding to the grouping 
of H. R. 25034. Here also it is found that a number of English 
prices are higher than the American, while in these latter instances 
the highest ad valorem rate necessary to equalize the difference was 
111.36 per cent, the lowest being less than 1 per cent. Certainly, 
the total costs show that except in a few instances, which must be 
attributed to some special causes, an extremely moderate rate of 
duty would equalize the producers ; selling prices even if no allowance 
were made for excess cost of transportation and marketing, a disad¬ 
vantage which falls heavily upon the foreign seller in this country. 

The following table shows the mill selling prices for staple cloths 
in the United States and England, together with the ad valorem rates 
of duty necessary to equalize differences in the prices in the two 
countries: 


Table 5. —English and American mill prices for staple cloths and ad valorem rate of duty 

necessary to equalize differences in prices. 

[Tariff Board Report, pp. 569, 570.] 


Kind of cloth. 

, . * - - - - . 

American 
mill selling 
price per 
linear yard. 

English mill 
quotation 
per linear 
yard. 

Difference. 

Ad valorem 
rate necessary 
to equalize 
differences 
in prices 
(per cent). 

Grey cloths: 

Narrow print. 

SO. 03375 
.02875 

SO. 03790 

+$0. 00415 


Do ". 

.03020 

+ .00145 
+ .00210 


Do. 

.02750 

.02960 


Do . 

.02750 

.02900 

+ • 00150 


Do . 

.02125 

.02190 

+ .00065 
+ .00100 


Do . 

.02000 

.02100 


Do . 

.04125 

. 04340 

+ .00215 


Do 

.03750 

. 04240 

+ .00490 


Do . 

. 03625 

. 04100 

+ .00475 


Wide, print. 

.06250 

.06257 

+ •00007 


d5. 

.05500 

.05470 

- . 00030 

0.55 

Do. 

.05625 

. 05500 

- . 00125 

2. 27 

Do . 

. 04875 

. 05030 



Do . 

. 03625 

.03970 

+ . 00345 


Do. 

.08375 

. 08270 

- .00105 

1.27 

Do. 

.08250 

. 07480 

- . 00770 

10.29 

Do. 

.08000 

.07280 

- .00720 

9. 89 

Do. 

.07000 

.06890 

- .00110 

1.60 

Do . 

.06875 

.07240 

+ •00365 


Do . 

.06375 

. 06670 

+ .00295 


Do . 

.05500 

.05640 

+ .00140 


Do . 

.03750 

.03870 

+ .00120 


Do . 

.03625 

.03790 

-f • 00165 


Do . 

.03125 

.03450 

+ .00325 


Do . 

.04500 

. 04790 

+ .00290 


'T'nhe.een elnths . 

.03500 

.03630 

+ .00130 


Do . 

.03350 

.03470 

+ .00120 


Do . 

.031875 

.03470 

+ . 002825 


Do . 

.029375 

.03100 

+ .001625 


Do . 

.029375 

.03080 

+ . 001425 


Do . 

. 028750 

.02920 

+ .000450 


Do . 

.02750 

.02760 

+ .00010 


Do . 

.025625 

.02640 

+ .000775 


Do . 

.02500 

.02580 

+ .OOOSO 


Do . 

.02250 

.02310 

+ . 00060 


Do . 

.02125 

.02250 

+ .00125 


Do . 

.02125 

.02130 

+ . 00005 


Do . 

.01875 

.01970 

+ . 00095 


Do . 

.01750 

. 01800 

+ .00050 


Do . 

.01650 

. 01620 

- .00030 

1.85 

Do . 

.01550 

.01460 

- .00090 

6.16 

Do . 

.01375 

. 01340 

- .00035 

2.61 

Do . 

.01330 

.01300 

- .00030 

2.31 

Do. 

.01270 

.01220 

- .00050 

4.10 


























































































22 DUTIES ON COTTON MANUFACTURES. 


Table 5. —English and American mill 'prices for staple cloths and ad valorem rate of duty 
necessary to equalize differences in prices —Continued. 


Kind of cloth. 

American 
mill selling 
price per 
linear yard. 

English mill 
quotation 
per linear 
yard. 

Difference. 

Ad valorem 
! rate necessary 
to equalize 
differences 
in prices 
(per cent). 

Sheetings.... _ . 

$0.08250 

$0.08310 

+$0.00060 


Do 7 . 

.07000 

.07260 

+ 

.00260 


Do 

.00250 

.06090 


.00440 


Do. 

.05500 

.05260 


.00240 

4.56 

Do . 

.05250 

.05350 

+ 

.00100 


Do . 

.05125 

.05370 

+ 

.00245 


Do 

.03875 

.03950 

+ 

.00075 


Do 

.09250 

.09250 




Do. 

.00625 

.06610 

— 

.00015 

.23 

Three-leaf twills _ 

.07250 

.07260 

+ 

.00010 


Do. 

.08000 

.07640 


.003C0 

4.71 

Do. 

.06875 

.06980 

+ 

.00105 


Do 

.00250 

.06270 

+ 

.00020 


Do . 

.056875 

.05740 

+ 

.000525 


Do 

.07250 

.07300 

+ 

. 00050 


Do 

.06625 

.06980 

+ 

.00355 


Do . . 

.06250 

.06410 

+ 

. 00160 


Do 

.00000 

.06000 




Do . 

.05375 

. 05540 

+ 

. 00165 


Do . 

.05125 

.05250 

+ 

.00125 


Do. 

.04375 

.04700 

+ 

.00325 


Filling sateens. 

.11250 

.10180 


. 01070 

10.51 

Do. 

.10500 

.09750 

— 

.00750 

7. 69 

Do. 

.09000 

. 08330 

— 

.00670 

8. 04 

Do. 

. 08000 

.07870 

— 

.00130 

1.65 

Do. 

. 06375 

. 06630 

+ 

.00255 


Do. 

. 06125 

. 06370 

+ 

. 00245 


Do. 

.06250 

. 06160 


. 00090 

1.46 

Do. 

. 05875 

. 05900 

+ 

.00025 


Warp sateens. 

. 13000 

. 12650 


. 00350 

2. 77 

Do. 

. 12500 

.10630 

— 

.01870 

17. 59 

Do. 

. 09500 

.09170 

— 

.00330 

3. 60 

Do. 

. 08500 

. 08310 

— 

.00190 

2.29 

Do. 

.07000 

.07400 

+ 

. 00400 








It is seen from this table that of the 78 sample quotations, 53 are 
higher in England than in the United States. In 23 instances the 
American prices were higher, while in two cases the prices are identical. 
In the 23 cases where the United States prices are higher than England, 
the highest ad valorem rate necessary to equalize the difference is 
17.59, while the lowest is 0.23 of 1 per cent. In this case, as in others, 
it is seen that on the basis of this table and assuming the board’s 
data to be correct there is a necessity of a tariff in England against 
American goods rather than the necessity in the United States for a 
tariff against English goods. 

With reference to plain goods generally, the board frankly admits 
(p. 12) that— 

in the case of a large variety of plain goods, the labor costs of turning yarn into cloth 
in the United States is not greater, and in some cases is lower, than in England. For 
cloths woven on automatic looms, this is especially the case; but on certain classes of 
fabrics the same holds true for plain looms due to the greater number of looms per 
weaver. 

There is no more reason for believing that the figures obtained by 
the board with reference to the estimated money outlay necessary in 
producing various kinds of cloth are more reliable than they were 
in the woolen industry. No matter how carefully these figures were 
obtained, it remains true that they are not costs in the proper sense 
of the word, but are estimates of costs prepared by interested manu¬ 
facturers who have been asked to state the amount of outlay 





































































DUTIES ON COTTON MANUFACTURES. 


23 


required to produce goods of a specified kind. But inasmuch as the 
board arrives at the conclusion that there is no appreciable difference 
between costs of plain fabrics in the United States and in England, 
those who wish to apply the board’s conclusions and to establish 
rates of duty upon a basis of difference in costs of production would 
be led to the conclusion that no duty is required on plain fabrics 
over and above the amount supposed to be needed on the yarn of 
which the fabric is composed. 

COTTON INDUSTRY IN JAPAN. 

A special section has been given by the board to the study of the 
cotton industry in Japan, with the apparent idea of ascertaining 
costs in that country as compared with the costs in the United States. 
This section professes to show “general data relative to cotton 
spinning and weaving mills in Japan.” Tables are given showing 
the number of machines employed and the approximate total daily 
earnings of each class of workers. This is given for both spinning 
and weaving mills and is continued with the statement of the 
average number of working days, average working spindles, amount 
of yarn produced, etc. The board, however, is obliged to admit that 
but little of its data on this subject is of much practical use. It 
was found impossible to select a mill of the same number of spin¬ 
dles producing the same kind of yarn as spun hi Japanese mills 
(p. 525), while it was found “very difficult to secure comparative 
costs and prices of similar American and Japanese cotton goods ” 
(p. 528). In spite of these facts, the prices furnished by the board 
on cloths said to be roughly comparable indicate that the jobbing 
prices in this country and in Japan are nearly the same. 

Table 6 shows the jobbing price per yard in the United States and 
Japan for three fabrics, together with the ad valorem rate of duty 
necessary to equalize differences in prices shown for the two countries: 

Table 6. —Comparative cloth prices in the United States and Japan and the ad valorem 
rate of duty necessary to equalize differences in prices. 


[Tariff Board Report, p. 528.] 


Sample. 

Jobbing price per yard. 

Ad valorem 
rate necessary 
to equalize 
differences 
in prices. 

American. 

Japanese. 

Difference. 

Grey drill . 

$0.075 
.075 
.095 

$0. 0737 
.0660 
.0925 

-SO. 0013 

- .0090 

- .0025 

Per cent. 

1.76 
13.64 
2. 70 

Grey sheeting. 

Cotton flannel. 


The board states that the Japanese fabrics are not identical with 
those of the United States because of differences in methods of pro¬ 
duction. Overlooking this limitation, however, it is found that the 
three samples call for ad valorem rates to equalize difference in prices 
of 1.76,13.64, and 2.70 per cent. The prices of Japanese cloths may 
be interesting to manufacturers who expect to ship to Japan, but 
are valueless for fixing tariff rates. 














24 


DUTIES ON COTTON MANUFACTUBES. 


COST OF FINISHING CLOTH. 

After the cloth has been woven, various processes included under 
the head of finishing are performed for the purpose of giving it the 
particular appearance that is desired. The board enumerates four 
principal processes in tins connection—bleaching, printing, merceriz¬ 
ing, and dyeing. Under the head of “Cost of finishing” (pp. 496 to 
519) it gives data obtained from several mills in the United States 
for the purpose of showing the relative percentage of the cost of finish¬ 
ing that is attributable to each of the processes already referred to. 

This analysis is first made on the basis of total cost shown in five 
mills, from which it appears that only three mills furnished complete 
data. In these three the percentages of cost vary considerably, the 
total labor cost in one being 38.63 per cent of the total; in another 
28.10, and in still another 28.09 per cent, while the total material cost 
of finishing was 24.24 per cent in the first, 33.14 in the. second, and 
19.25 per cent in the third. There was also a great variation in the 
percentage of costs attributable to the different processes. In order 
to get at the situation more specifically the board has, therefore, 
compiled a table (p. 497) which shows the detailed cost of finishing 
selected samples. The effort in this is to establish the percentage 
of total cost which is represented by the various processes. This 
analysis is carried through a considerable number of samples, and 
large variations are found to exist from sample to sample. In con¬ 
clusion the board states that the labor cost of bleaching constitutes 
from one-fourth to two-fifths of the total finishing cost, while that of 
printing varies from about one-sixtli to over one-third of the total cost 
of finishing. The cost of dyeing was more uniform, and the labor 
element in it constituted about one-fifth of the total cost of finishing, 
while the cost of the dye materials varied from 6.47 to 9.19 per cent 
of the total cost of the cloth. The labor cost of mercerizing ranged 
from 0.69 to 1.09 per cent of the total cost of cloth, while the cost of 
materials used in mercerizing varied from 2.72 to 4.29 per cent of the 
total cost of the cloth. This showed a variation of about 60 per cent. 

In all of this no comparative cost data have been furnished, but the 
board finally undertakes a comparison (p. 501) of the finishing cost 
in the United States and England. A table is given showing the com¬ 
parison of costs between the two countries. Here, however, difficulty 
is at once encountered, although the section is headed (p. 501) “Cost 
of finishing in the United States and England.” An examination of 
the tabular matter shows that the figures given are not “costs” and 
do not actually profess to be. In fact, the table is headed “Com¬ 
parison of charges for finishing/' This includes the profit exacted by 
the finishing mill and the charge at the textile end of the manufactur¬ 
ing process. The board says: “A comparison of the finishing charges 
in the two countries is, therefore, indicative of the relative cost of the 
finishing in those countries.” If this were true, the same principle 
might be applied throughout the inquiry and the cost analysis might 
as well be discarded. Accepting the board’s statement of compara¬ 
tive charges, however, in lieu of its statement on comparative costs, 
the showing indicates that in the case of the 100 samples for which 
more or less complete data were obtained a large majority reported 
that the American charge was lower than the English. 


DUTIES ON COTTON MANUFACTURES. 


25 


In a few instances the American rates were only about one-half of 
the English rates. Inasmuch as the added duty under the tariff act of 
1909 is in excess of the total cost of finishing in this country, while 
these charges are, in the main, much lower here than in England, it 
would appear that there is no justification whatever for the present 
duty on finished goods from the standpoint of the cost of production. 
In the few cases where finishing charges are higher here than in Eng¬ 
land, as ascertained from the sample study, the duty is found to be 
many times the difference by which American exceed English charges. 
The conclusion, therefore, to be drawn from the board’s study of the 
processes of finishing, including the processes already enumerated— 
bleaching, printing, mercerizing, and dyeing—is that no duty what¬ 
ever is called for with respect to these processes in manufacture, and 
that such duty as may be imposed in that connection will be of service 
merely from the standpoint of revenue, and might as well be dis¬ 
carded entirely unless it be desired to impose a revenue duty upon 
goods which have been subjected to these particular processes. 

HOSIERY AND KNIT GOODS. 

A study of hosiery and knit goods was made by the board and 
the data are given in section 2 of the report (pp. 593 to 629). In 
examining these articles, a separation is first made between dif- 
erent classes, starting with men’s balbriggan underwear, then passing 
to ribbed underwear, and finally to hosiery of various descrip¬ 
tions. The method of collecting data followed was that of ob¬ 
taining the cost of manufacture on sample garments from Ameri¬ 
can mills. Twenty-three such samples were taken in the case of 
men’s balbriggan underwear and separate costs per dozen were ob¬ 
tained for long-sleeved shirts, for drawers, etc. These costs were 
given as including yarn, trimmings, labor, mill expenses and fixed 
charges, depreciation, and selling expenses. With these are asso¬ 
ciated the figures for the retail price per suit, together with tabular 
matter showing the percentage relation between material and manu¬ 
facturing costs, etc. All this furnishes the basis for a study of com¬ 
parisons between estimated costs on underwear as given by manu¬ 
facturers and selling prices. There are no data in the report to show 
that these costs were obtained directly from mill books. On the 
contrary, the indication is quite the reverse. The schedules employed 
by the board include none relating to hosiery or knit goods as such, 
and the statement at the opening of the discussion of the hosiery and. 
knit-goods section calls attention to the fact that the tabular matter 
refers to the cost of different sample suits, although there is no spe¬ 
cific description of the way in which these costs were obtained. The 
same is true of the other knit goods and hosiery to which reference 
is made. 

As has been noted, none of these data, however accurate, has any 
relation to foreign costs, and there is no suggestion that foreign costs 
have been obtained. On page 599 a table is given showing “ Domestic 
costs, with foreign and domestic selling price, of men’s balbriggan 
underwear.” A similar method is followed with reference to hosiery. 
Thus, the board entirely abandons the cost comparison idea in its 
study of relationships between domestic and foreign charges on these 
items. When the board comes to the study of hosiery, a special 


26 


DUTIES ON COTTON MANUFACTURES. 


point is made of the comparison between the United States and 
Germany, and on page 614 appears a section entitled “The cost 
of producing ladies’ full-fashioned hosiery in the United States and 
Germany.” The table on which this study is based (p. 615) has noth¬ 
ing to do with costs. The descriptive matter states: 

The table shows the cost of material, productive labor, mill expenses, selling ex¬ 
penses, and mill selling prices in the United States and Germany. 

However, following the table is found this statement: 

The above table is a comparative statement of American apd German full-fashioned 
ladies’ hose based upon the mill-selling price per dozen rather than the cost, since 
it includes the mill profits. 

In a study of men’s hosiery the same method is also followed. 
With reference to children’s hosiery, six different samples were an¬ 
alyzed, and the so-called costs are reported in a table (p. 626). 

No conclusions are furnished by the board with reference to the 
difference in cost, but a study of the table (pp. 598-601) shows that in 
the case of men’s balbriggan underwear, for example (sample No. 1), for 
long-sleeved suits at a cost of $10.21 per dozen (domestic; the foreign 
selling price is $6.75. Sample No. 2 shows the domestic cost per 
dozen to be $6.43 and a foreign selling price $4.35 per dozen. Sample 
No. 3 shows a domestic cost of SI 1.18 per dozen and a foreign selling 
price of $6.66 per dozen. Foreign goods, like sample No. 1, are sold 
in the United States at a price practically the same as that of domestic 
goods and domestic goods like sample No. 2 sell for decidedly less than 
foreign goods; the same is true of sample No. 3. In the case of other 
samples it was found in certain instances that costs in the United 
States were less than the foreign selling price, while the selling prices 
of foreign goods were much less than the domestic selling prices of 
similar domestic goods. No uniformity is shown in the figures 
relating to these samples and the only conclusion to be drawn is that 
the cost shown depends upon the mill examined and the general con¬ 
ditions under which figures were obtained. The existing tariff rate 
on hosiery and knit goods is equivalent to 72.49 per cent. The rate 
proposed in H. R. on 25034 such items is from 20 to 40 per cent. 
It should be kept in mind, however, that many of the articles given 
are not made in both countries and comparisons can be instituted 
between them only upon an artificial basis. They are goods which 
might be substituted for one another in either country under certain 
circumstances, but which would not compete in the proper sense of 
the term. 


Ox ^ CO to 


DUTIES ON COTTON MANUFACTURES. 27 


The following three tables show the results of the board’s investi¬ 
gation of the prices of hosiery and underwear: 


Table 7. —Comparative summary of mill selling prices per dozen pairs of ladies’ full- 
fashioned hose in the United States and Germany , together with the ad valorem rate of 
duty necessary to equalize differences in prices. 

[Tariff Board Report, p. 615.] 


Unit number. 

Mill selling price. 

Ad valorem 
rate neces¬ 
sary to 
equalize dif¬ 
ferences in 
prices (per 
cent). 

United 

States. 

Germany. 

Difference. 

1. 

$2.10 

1.875 

1.850 

2.300 

1.825 

1.850 

2.000 

$1,375 

1.500 

1.000 

2.000 

.929 

.993 

1.000 

-$0.725 

- .375 

- .850 

- .300 

- .896 

- .857 

- 1.000 

52.73 

25.00 

85.00 

15.00 

96.45 

86.30 

100.00 

2. 

3. 

4. 

5. 

6. 

7. 



Table 8. —Comparative summary of domestic costs and foreign selling prices per dozen 
suits of men’s balbriggan underwear , together 'with the ad valorem rate of duty necessary 
to equalize difference between the domestic cost and foreign selling price. 

[Tariff Board Report, pp. 599, 600.] 


Sample No. 

Domestic 

cost. 

Foreign sell¬ 
ing price. 

Difference. 

Ad valorem 
rate neces¬ 
sary to 
equalize dif¬ 
ferences be¬ 
tween do¬ 
mestic cost 
and foreign 
selling prices 
(per cent). 

1. 

$10.2062 

$6. 746 

-$3.4602 

51.29 

2. 

6.4256 

4.350 

— 2.0756 

47.71 

3. 

11.1794 

6.664 

— 4.5154 

67. 76 

4. 

6.0202 

4.350 

— 1.6702 

38.40 

5.. 

6.1560 

4.150 

- 2.0060 

48.34 

6. 

5.6910 

4.350 

— 1.3410 

30.83 

7. . 

5.4236 

6.420 

+ . 9964 

8. . 

5.2326 

6.420 

+ 1.1874 


9. 

5.0952 

6.036 

+ .9408 





Table 9. —Comparative summary showing mill selling prices of full-fashioned men’s 
half hose in the United States and Germany , and the ad valorem rate necessary to 
equalize differences in prices. 


[Tariff Board Report, p. 616.] 


Unit number. 


1 


Mill selling price. 

Ad valorem 
rate neces¬ 
sary to 
equalize dif¬ 
ferences in 
prices (per 
cent). 

United 

States. 

Germany. 

Difference. 

$1.45 

$1,000 

-$0.450 

45.00 

1.60 

.774 

- .826 

106. 72 

1.68 

1.000 

- .680 

68.00 

1.72 

.941 

- .779 

82. 78 

1.68 

.830 

- .850 

102.41 




























































28 


DUTIES ON COTTON MANUFACTURES. 


The same method heretofore employed has been followed in the 
preparation of these tables. The prices for specified garments in the 
United States and for the corresponding garments in Germany have 
been tabulated and compared. The tables show ad valorem rates of 
duty necessary to equalize differences in prices ranging from 15 per 
cent to more than 100 per cent. In considering these tables it should 
be observed that the comparison is not based upon articles that were 
identical in the two countries. With reference to fleeced underwear, 
the board says that there are no importations competing with similar 
goods, so that a comparison is not possible. With reference to 
women’s ribbed underwear, it finds that not the cheaper but only the 
more expensive grades are imported. On ladies’ full-fashioned 
hosiery the table shows the domestic cost of production and the 
mill selling prices in the United States and Germany. No actual Ger¬ 
man costs are given. It is pointed out (p. 616) that “ yarns of similar 
construction were selected so far as possible” and that the items are 
not exactly comparable, as the industry is comparatively new in 
the United States. With reference to men’s full-fashioned half 
hose, the industry is on a different basis in the United States as 
compared with Germany. Thus the board speaks merely of United 
States prices which are “ similar” to the German. Hence the inquiry 
into relative costs for knit goods and hosiery is most unsatisfactory. 
No actual foreign costs whatever are given, while in contrasting prices 
it appears that the articles are not comparable, not being made in the 
same way and not really competitive. In general these goods are 
produced in the United States under conditions quite different from 
those abroad. The tables showing comparative prices can not be 
regarded as much more than a very general approximation to the 
facts. 

The board does show that prices for this class of goods are high in 
the United States and that the duties are very heavy. If the manu¬ 
facturers were subjected to competitive conditions, the inference from 
the board’s statements must be that the industry would be placed 
on a competitive basis and prices equitably adjusted. It should be 
observed that the duties now levied in the United States on these 
classes of importations are not nearly so high as the ad valorem per¬ 
centages which are indicated by the board’s investigation. For ex¬ 
ample, on hosiery it appears that the ad valorem equivalent for the 
less expensive grade (valued at not more than $1 per dozen pairs) 
in 1911 was 92.42 per cent, while on the more expensive grades it ran 
from 55 to 76.95 per cent. The very highest class of goods valued 
at over $5 per dozen pairs of hose pays 55 per cent. Duties indicated 
by the investigation of the Tariff Board would be, in many instances, 
very much higher than the rate fixed in the tariff, notwithstanding 
importations either did not occur in these particular articles or are 
so slight as to be negligible. In some lines there are regular impor¬ 
tations, of course, but that condition is not by any means general. 
It seems to be true that differences in style, fashion, etc., are the real 
basis for the differences in prices that are quoted and that the com¬ 
parisons instituted by the board are not properly to be regarded as 
sufficiently indicative" of the conditions in the industry to permit of 
their serving as a guide. In fact, the very wide variations in prices 




DUTIES ON COTTON MANUFACTURES. 29 

among the various samples or units which were investigated would 
seem to sustain this conclusion. 

As already stated, there are no actual costs in the board’s report 
with respect to hosiery or knit goods. At the census of 1909 the 
production of cotton hosiery and underwear in the United States 
was valued at over $115,000,000 as against about $50,000,000 in 
1899. Our total imports for consumption of cotton knit goods in 
1911 were less than $4,500,000, or less than 4 per cent of the total 
consumption. On these importations were collected tariff duties 
amounting to about $3,200,000. The present situation is largely 
prohibitive, notwithstanding the prices shown by the board in many 
instances figure out in ad valorem equivalents higher than the existing 
rates of duty. It is evident that the portion of the board’s report 
relating to this phase of the cotton-goods industry does not afford 
sufficient reliable data to serve as a basis for tariff action. 

COST OF MILL EQUIPMENT. 

In examining the causes of variations in costs in different countries 
the board considers differences in costs of equipment and in labor cost. 
The study of the relative costs of mill equipment in England and in the 
United States is given on pages 462 to 467. In this section it is 
attempted to draw a comparison between the textile machinery that 
would be used in equipping a representative mill of 50,000 spindles in 
the United States and in England, to spin 32’s warp and 50’s filling 
yarn, and the weave shed to contain sufficient looms to weave the 
product of the spinning mill into standard print cloth, 32 inches wide, 
64 by 64, and 7.35 linear yards per pound. In making this analysis, 
the board calls attention to the fact that if it were desired to use Eng¬ 
lish machinery in American mills, tariff duties would have to be paid 
on the machinery thus imported. But it is further noted that com¬ 
paratively little cotton textile machinery is imported into the United 
States, the bulk of it being manufactured here. The effort, therefore, 
is to ascertain the prices paid for given equipment in the United States 
and the similar equipment in England, bearing in mind, of course, that 
this equipment is not exactly the same, owing to differences in indus¬ 
trial practices between the two countries with reference to equipping 
a mill. The result of the comparison is to show that, for spinning 
mills, the cost in the United States is $17.43 per spindle, while in 
England it is $12.72 per spindle, the cost in England being 73 per cent 
of the cost in the United States. 

A further analysis also shows that— 

On standard print cloths, * * * a margin of one-fourth of a cent per yard will 
offset the difference in cost of production between the United States and England due 
to depreciation on the larger investment and to dividends at 8 per cent on the extra 
capital required in the United States (not considering working capital). 

It may be concluded, therefore, that the board believes the cost of 
equipping a spinning mill in England is about 73 per cent of what it 
is in the United States, with corresponding difference in the weaving 
equipment, and that a tariff of one-fourth of 1 cent a yard would 
approximate the difference in cost of production between the two 


30 DUTIES ON COTTON MANUFACTURES. 

countries. If the standard cloths spoken of were 5 cents a yard, this 
allowance of a quarter of a cent would be equivalent to 5 per cent 
tariff duty, which would have to be added, presumably, to the duties 
shown to be necessary to equalize differences in cost of conversion, 
since this additional duty would be called for by the supposed varia¬ 
tion in cost of capital. This surplus duty may be considered in con¬ 
nection with the statements herein made as to the amount of duty 
supposedly shown by the board to be necessary to equalize general 
costs in the two countries. 

Meanwhile it should be observed that there is no basis for making 
any such allowance for a duty intended to offset differences in cost 
of capital between England and the United States unless it be 
assumed that the maintenance of the tariff all around as at present 
is to be considered a permanent factor of industrial organization in 
the two countries. Much of the difference in cost of capital is 
attributable to the difference in the level of prices in the two countries. 
The price of mill machinery is, in part at least, affected by the tariff 
duties on the different items that go into the production of such 
machinery. The rate of interest on the capital itself is influenced in 
a measure by the level of prices in the country, and the same modifying 
factor prevails throughout the whole of the comparison which the 
board seeks to draw between the cost of equipment of a cloth mill in 
the United States and the cost of a similar equipment in England. If 
tariff duties or the other items included in cost of manufacture were 
materially reduced and if reductions in prices were effected thereby, 
the necessity for an extra duty of this kind would practically disap¬ 
pear. The error involved in the assumption that these supposed 
differences in cost of equipment are permanent is the same mistake 
as made in connection with the report on wool and manufactures 
thereof, where the difference in the cost of equipping a mill in the 
two countries was apparently regarded as permanent, and therefore 
to be reckoned as one of the elements in the cost of producing the 
fabrics. There is no economic reason for making any allowance what¬ 
ever for this difference in supposed costs, except on the assumption 
that such differences in cost are a permanent outgrowth of the main¬ 
tenance of the present system of tariff duties and the consequent 
retention of the general level of prices in the United States at an 
unduly high point. 


EMPLOYEES IN COTTON MILLS. 

A large part of the board’s report deals with the condition of 
employees in cotton mills. One section is devoted explicitly to that 
subject (pp. 629-666). That section has to do largely with the 
wages in the industry and gives information “ relative to wages and 
general conditions of labor” secured from the books of various estab¬ 
lishments. The statements are chiefly those that were included in 
the cost investigation, although information relative to wages was 
not secured for all the mills for which cost figures were obtained. 
In each case data were obtained showing the number of employees 
when the mill was running full time and showing the wage subdivision 
between men, women, and children; rates of earnings, detailed occu¬ 
pations, etc. In securing the English wage data dependence was 
placed upon the information compiled by the British Board of Trade 
(p. 634). Comparisons were then made between the figures for wages 


DUTIES ON COTTON MANUFACTURES. 


31 


for the United States and Great Britain. From these figures the con¬ 
clusion was drawn that the hourly earnings of weavers in the United 
States are 55.5 per cent higher for males and 78.6 per cent higher 
for females than the earnings of weavers in England. In the south¬ 
ern United States the weavers’ hourly earnings are 32.9 per cent 
higher for niales and 42.5 per cent higher for females than in England. 

Similar instances exist throughout the various occupations. The 
showing thus made is by itself of no interest, as the board has already 
undertaken to show that in spite of these higher wages lower costs in 
many instances actually exist in the United States. As is well known, 
the comparison of money wages by the hour, day, or week is of no 
service to indicate the relative costs, since the true cost depends 
directly upon the product turned out as well as the money used. 
Two elaborate investigations have recently been made by the Gov¬ 
ernment with reference to the cotton-goods industry and for the special 
purpose of examining wage conditions. One of these investigations 
is found in the report of the Immigration Commission; the other is a 
report of the Bureau of Labor of the Department of Commerce and 
Labor. These reports furnish much more comprehensive information 
concerning the general conditions in the industry than is found in the 
Tariff Board report on cotton. This work of the board appears, there¬ 
fore, to have been unnecessary in so far as it was an analysis of the 
wages and conditions of work of the cotton-goods industry. 

QUESTION OF LABOR COST. 

Of more direct significance is the question of labor cost. Much 
attention has been given by the Tariff Board to the question of labor 
cost, and in many cases where labor costs are given for different mills 
and for different cloth samples special pains have evidently been 
taken to ascertain the proportion of the labor cost as compared with 
the total cost of producing or finishing given classes of articles. The 
apparent purpose of this analysis is not to compare labor costs in this 
country with those of foreign countries, since, as we have seen, the board 
gives but few alleged actual foreign costs for manufacturing. It does 
give some computed labor costs for samples upon which estimates 
have been obtained, but these must be disregarded for the reasons 
already set forth. Moreover, the board itself devoted much atten¬ 
tion to analyses of labor costs in the United States in cases where it 
does not even profess to have foreign costs as ascertained on the 
sample basis. It would appear, therefore, that in preparing this 
report the board entertained the opinion that some special reason 
existed for ascertaining labor costs. The purpose of such ascertain¬ 
ment appears to be found in the occasional comparisons between 
tariff duties and labor costs. In many instances, statements are made 
by the board to the effect that the duty on given items greatly exceeds 
the labor cost or bears a certain proportion to labor costs, etc. This 
is a further development of the idea of cost of production as a meas¬ 
ure or gauge for fixing tariff duties and is of special interest because 
of the disposition apparent in some quarters to seek an adjustment of 
the tariff which shall equalize differences in the cost of labor or which 
shall in some way base the tariff duty upon the labor cost in the 
production of given articles. It is therefore desirable to understand 
exactly what the labor-cost idea implies from the standpoint of tariff 


32 


DUTIES ON COTTON MANUFACTUKES. 


theory if a proper estimate or conception of the value of the work is 
to be formed in this connection. 

It should be noted in the first place that the use of the term ‘‘labor 
cost” in the kind of study that has been attempted by the Tariff 
Board is misleading. Cost accountants distinguish between so-called 
prime costs and “ burden.” The prime costs are recognized as two¬ 
fold—stores or material, and labor—while the “burden” is usually 
divided into machine costs, expenses of administration, etc. The 
discussion of burden and prime costs, including labor costs, is of much 
interest in those cases where one factory is competing directly with 
some other, which employs exactly the same class of labor, with prac¬ 
tically the same degree of efficiency, which sells in the same market, 
and whose workmen are obliged to pay the same price for goods and 
are of the same general grade of efficiency. Where these conditions 
are lacking the comparison breaks down. Ascertainment of the 
amount paid for wages in any given instance is of less interest. If 
labor costs are ascertained per unit of product,'they may afford a clue 
to the competitive power of manufacturers in different countries, 
although the general level of prices is similar. It doels not greatly 
matter to a manufacturer whether he has a higher labor cost than 
another, if the other elements of cost are sufficiently low to offset 
the increased expenses to which he is subjected by reason of his higher 
labor cost. 

Moreover, if the country is taken as a whole, the distinction be¬ 
tween labor costs and other costs tends to disappear. What is one 
manufacturer’s labor cost may be, in a large measure, the material 
cost of another manufacturer. Producer No. 1 turns out goods 
which are used by No. 2 as materials of manufacture. But in pro¬ 
ducing them No. 1 has had to incur a labor cost, and in the last anal¬ 
ysis items of outlay may be sifted down largely to labor and to oppor¬ 
tunities for production. The analysis of labor cost is not, therefore, 
of any particular service as between two different countries, and its 
use in the way indicated by the board is subject to a serious general 
theoretical criticism. 

Waiving this point, however, the study of labor costs in connection 
with tariff duties appears to assume that the effect of a tariff duty is, 
or was intended to be, that of securing the laborer in the enjoyment 
of the highest wages, even though this may imply a higher cost or 
sacrifice to the producer. This, in another form, is the statement 
that protection is intended for the employee, and that its effect is to 
raise the wages which he receives. Clearly this is what the board has 
in mind in what it writes concerning tariff duties and labor costs. 

There is, however, no ground for accepting the theory of the board. 
In fact the data fail to show that high tariffs have had any effect in 
keeping up the returns to labor. The supposed influence of the pro¬ 
tection to labor, in other words, has been entirely absent, and there is 
no reason to suppose that any relationship whatever exists between 
the labor cost of the fabric and the amount of the tariff. Moreover, 
the board’s report illustrates clearly what has long been known, 
that in many of the items of importation under the cotton schedule 
the efficiency of American labor per unit was such as to put us in a 
position to compete successfully with the labor of any country in 
the world. The fact that in certain instances labor costs per unit of 


DUTIES ON COTTON MANUFACTURES. 


33 


product are higher in this country than elsewhere must be regarded 
as exceptional, for in the majority of cases we are in a position to 
produce as efficiently as any foreign country. In such cases the rela¬ 
tionship between the percentage of labor cost and the amount of the 
tariff can not be traced even under the protective theory, since, if it be 
assumed that the tariff is intended to offset differences in labor costs 
and to enable the manufacturer to make up to the worker for his lack 
of skill by paying him the same wages as if he were fully prepared to 
compete with the foreigner, the whole fabric of the assumption falls 
to the ground when efficiency is found to be identical in the two 
countries or even higher here than abroad. 

CRITICISM OF TARIFF OF 1909. 

The Tariff Board has devoted much attention to the form which 
was given to the cotton duties in the tariff of 1909, and the dis¬ 
cussion of that subject is of especial interest as presenting the history 
of a frequently neglected phase of the duties in the present cotton 
schedule. When the tariff of 1909 was under discussion before .the 
Ways and Means Committee, cotton manufacturers appeared before 
the committee with the statement that the existing duties were en¬ 
tirely satisfactory to them, and that there was no good reason for 
revising the schedule. Subsequently manufacturers appealed to the 
committee and following this certain new provisions were introduced 
with reference to the classification of cloths. These provisions were 
so manifestly designed to give exceptional protection to producers 
who did not need such excessive rates of duty that they were elimi¬ 
nated before the tariff bill of 1909 left the House of Representatives. 
They later made their appearance in an aggravated form while the 
measure was in the Senate. 

At that time these provisions were fully discussed upon the floor 
and they have again been considered by the board. The provisions 
in question are chiefly concerned with the method of classifying 
cloths and with the process of mercerization. On the former question 
the board says (p. 446): 

It should be carefully kept in mind that the duty, although nominally specific, is 
assessed according to variations in value. Consequently, in the case of simple fabrics, 
in the value of which the labor or conversion cost is a slight element, a high price for 
the raw material makes the duty very much higher in proportion to the conversion 
cost than it would be when the price of material is low. The foreign values on which 
these rates have been computed are for July, 1911, when the price of cotton was rela¬ 
tively high. * * * It should also be noticed that a slight change in the number 
of threads may have a marked effect on the duty. * * * 

And again the board says (p. 453): 

Taking up the cloths by paragraphs of the tariff, we find that the labor cost of plain 
cloths dutiable under paragraph 315—that is, cloths not exceeding 100 threads to the 
square inch—varies from less than two-thirds of 1 cent to less than cents per square 
yard, while the total conversion cost—that is to say, the entire cost of manufacturing, 
not including the value of raw cotton—varies from less than 1.2 cents to 2.6 cents 
per square yard. . 

The duties on unbleached cloths under this paragraph range from 1 to 6 cents per 
square yard, on cloths valued at not more than 14 cents per square yard, and on cloths 
exceeding that value it varies from 25 per cent to 42 per cent ad valorem. * * * 
This duty constitutes * * * from nine-tenths to nearly three times the American 

labor cost, and from 54 per cent to 141 per cent of the total conversion cost. 

H. Rept. 829, 62-2-3 


34 


DUTIES ON COTTON MANUFACTURES. 


The same situation is found in the other paragraphs where the 
method of counting the threads, embodied in paragraph 315 of the 
tariff act, is influential in fixing the rates of duty. An examination 
of the tariff act of 1909 shows that the rates "to which the board 
refers in paragraph 315 are as follows: Cotton cloth, valued at not 
over 7 cents per square yard, not bleached, dyed, colored, stained, 
painted, or printed, and not exceeding 50 threads to the square inch, 
counting the warp and filling, 1 cent per square yard; if bleached, and 
valued at not over 9 cents per square yard, 1J cents per square 
yard. * * * Exceeding 50 and not exceeding 100 threads to the 

square inch, counting the warp and filling, and valued at not over 
7 cents per square yard, not exceeding 6 square yards to the pound, 
1J cents per square yard, etc. The same method of grouping the 
rates of duty is found in paragraphs 316 and 317, so that it is a char¬ 
acteristic of the tariff act of 1909. 

With reference to mercerization, the provision inserted in the 
act is found in paragraph 313 and reads: 

That all the foregoing threads and yarns as hereinbefore provided, when mercerized 
or subjected to any similar process, shall pay, in addition to the foregoing specific 
rates of duty, one-fortieth of one cent per number per pound. * * * 

Moreover, in paragraph 320 is found the statement that— 

In determining the count of threads to the square inch in cotton cloth, all the warp 
and filling threads, whether ordinary or other than ordinary, and whether clipped or 
undipped, shall be counted. In the ascertainment of the weight and value, upon 
which the duties, cumulative or other, imposed upon cotton cloth are made to depend, 
the entire fabric and all parts thereof, and all the threads of which it is composed, 
shall be included. 

The terms bleached, dyed, colored, etc., * * * wherever applied to cotton 
cloth in this schedule, shall be taken to mean, respectively, all cotton cloth which 
either wholly or in part has been subjected to any of these processes, or which has any 
bleached, dyed, colored, stained, mercerized, painted, or printed threads in or upon 
any part of the fabric. 

The effect of this provision was to add the excess duty allowed for 
the processes specified and, particularly for mercerization, even in 
those cases, where there were but few mercerized or specially treated 
threads employed in the process of manufacture. 

On the question of mercerization (p. 500) the board says: 

The labor cost of mercerizing will be seen to vary from 0.69 to 1.09 per cent of the 
total cost of the cloth, while the cost of materials varies from 2.72 to 4.29 per cent 
of the total cost of the cloth. 

In the study of samples (p. 500) it is found that the— 

labor cost of finishing sample No. 11 is 0.16 of 1 cent per square yard and the duty is 
0.25 of 1 cent. The labor cost of finishing sample No. 12 is 0.15 of 1 cent and the 
duty on finishing is 1 cent per square yard. The labor cost of finishing sample No. 
13 is 0.15 of 1 cent per square yard and the duty is 1.50 cent. 

Here we have three cloths of the same kind differing by 0.01 of 1 
cent per square yard, and yet the duty on sample No. 13 is six times 
as high as on sample No. 11, and the duty on sample 12 is four times 
as high. The same absurd variations in rates are pointed out by 
the board in various other estimates of costs which it has obtained 
on specified samples and constitute its comment upon the provisions 
inserted in the tariff act of 1909 at the instance of the manufacturers 
who had previously admitted that no further protection than that 
afforded by the act of 1897 was needed. 


DUTIES ON COTTON MANUFACTURES. 


35 


BOARD CRITICIZES MERCERIZATION DUTIES. 

The Tariff Board admits all that was claimed concerning the mer- 
cerization duties at the time the tariff of 1909 was under discussion. 
Precisely the same points were referred to last summer when the 
House was considering H. R. 12812, but the effect of the duties as 
then formulated was again denied by Republicans, and President 
Taft vetoed H. R. 12812 when it finally reached him. There can be 
no question about the effect of the duties imposed under the tariff act 
of 1909, and the Tariff Board has simply accepted the general verdict 
of the trade in connection therewith. Since the accuracy of the 
facts set forth with reference to the effect of these duties has 
been admitted, there should be no further hesitation in conceding 
that they constitute the most unfair and at the same time unwar¬ 
ranted feature of the existing law. The evil can be easily cor¬ 
rected by the application of ad valorem duties upon the imported 
goods covered by the schedule and the rates should be thus read¬ 
justed in accordance with H. R. 25034. There is not now and never 
lias been any technical difficulty in securing the equitable application 
of ad valorem rates with reference to all cotton goods of a certain 
class or kind. This is the plan, therefore, which was followed in 
H. R. 12812 at the first session of the Sixty-second Congress and 
which is now again recommended in the bill herewith presented. 

PRICES AND THE TARIFF. 

Much attention is given to the question of retail prices for cotton 
goods and the relation of these retail prices to cost of production. 
On page 539 the board presents a table showing the range of prices 
on cotton cloths from producer to consumer and makes the following 
statement: 

The producer’s price, jobber’s price, and retailer’s minimum price for each of 
the 100 samples selected is given * * * (p. 536). To illustrate the connection 
between prices at the different stages of distribution, let us take a fabric retailing at 
25 cents a yard. The usual price which a retailer will pay for this cloth is 16.5 cents. 
If he has to encounter considerable competition and caters to a discriminating public, 
he may be obliged to get a higher grade of cloth for which he will have to pay 17.5 
cents, and sometimes as much as 18.5 cents. On the other hand, if conditions are 
favorable to him he will try to save on his purchase price and will buy cloths at a 
lower price, paying as little as 15 cents, and, in exceptional cases, 14.5 cents or less. 
Whether he pays 2 cents more than the customary 16.5-cent price, or 2 cents less, 
he will still continue to retail his cloth at the set price of 25 cents. Within certain 
limitations, therefore, competition between the retailers will take the form not of 
selling the same cloth at a lower price but of offering better goods at the same set price 
(p. 537). 

Even if the cost of production changes to an extent that would 
require an increase in prices beyond the limit set, the producer’s 
prices will have to be increased beyond the limit, resulting in an ulti¬ 
mate price to the consumer of 29 cents or more, frequently 35 cents, 
or else the quality of the cloth will be lowered by reducing the char¬ 
acter of the material or otherwise saving in expenses. 

Much data are given by the board as to various kinds of cloth, 
character of finish, selling prices from producer to jobber, selling 
price from jobber to retailer, and prices from retailer to consumer. 
In all of these data it appears that a system of price gradations has 
been established to limit and determine the amount of profits to be 


36 


DUTIES ON COTTON MANUEACTURES. 


realized by jobbers, retailers, etc. The point is definitely shown that 
this condition is quite different from that which exists abroad. In 
England the principal difference as compared with our method of 
establishing trade prices is the lower rate or gross profit prevailing in 
that market both in jobbing and retailing, although English ret ail prices 
are not as firmly fixed as in the United States. English and Canadian 
producers who find the cost of production advancing from year to 
year do not cut down prices so as to maintain profits but increase 
the price of cloth in a manner corresponding to the increased cost of 
production. The result is an advance in retail prices based upon the 
advance made by the mills and not due to any system whereby an 
artificial advance from one range of prices to another is made merely 
because there has been a slight increase in manufacturers’ charges. 

The board supports its statements by pointing out that of the 100 
samples studied 93 are priced on a comparative basis in both Eng¬ 
land and the United States, and that of these, 37 are sold by the pro¬ 
ducer at a higher price in England than in the United States, while 
56 are sold at higher prices in the United States than in England. 
In the case of unbleached cloths every sample sells at a lower price 
here than in England. The same is true of many other classes of 
cloths enumerated by the board on pages 565 to 570, yet it even 
appears that in spite of a lower price at the American mill than is 
made in England, the price charged the retailer and consumer is 
higher here than in England. For example, in the case of the Tariff 
Board’s illustration No. 3 (p. 562, sample No. 51), the cloth is 
sold by American mills at 10.5 cents a yard, jobbed at 12.5, and 
retailed at 19.25 and sometimes 29 cents a yard, according to the 
competitive trade in a given locality, yet the same is sold by the 
English mill at 10.15 cents per yard, or very nearly the same as 
the United States, and retailed at 15.22 cents. Other goods of the 
same kind are mentioned, and the board reaches the conclusion that 
11 at the price at which the cloth is sold in England a reduction in duty 
would have no effect upon the distributive prices in this country.” 

The general argument through this whole portion of the report 
appears to be that the relation between tariff duties and prices of 
cotton goods is not very close and that the prices in this country are 
higher because of trade systems and methods of jobbing and whole¬ 
saling which are not established in England or in other competitive 
countries. Sharp exception must be taken to any conclusion that a 
reduction in duty would not affect this situation. There is every 
reason to suppose that the removal of, or even a substantial reduction 
in, the duty on these classes of goods would have the effect of com¬ 
pelling those engaged in the trade to sell them at prices which would 
have only a fair margin of profit instead of insisting upon prices 
which in many instances yield an exorbitant profit. The conclusion 
which the board has apparently reached in this regard is that trade 
customs are more important than the tariff in establishing retail 
prices. This view neglects the real fact that such a system of trade 
prices as is said to prevail in the United States probably would not 
have arisen had it not been for the shelter afforded by exclusive 
duties. 


DUTIES ON COTTON MANUFACTURES. 


37 


CHARGES AGAINST COMBINATIONS. 

The practice of throwing all the blame for high prices of cotton 
fabrics on agreements made by the middleman and wholesaler, and 
of asserting that this condition had no relation to the tariff has pre¬ 
vailed ever since the debate on the tariff of 1909, when this point of 
view was exploited at considerable length on the floor of Congress by 
defenders of the tariff law as then framed. Subsequently they have 
raised the same question in connection with the high cost of living. 
One of the causes of advancing prices stated by the Senate com¬ 
mittee, which had charge of that inquiry, was the excessive profits 
of middlemen, said to be due to combinations and associations. 
The same point of view has since been debated by various executive 
departments of the Government, notably the Department of Agri¬ 
culture, which has been actively engaged in ascertaining prices and 
changes therein. The essence of the argument of the defenders of 
excessive protective duties has been that the profits by middlemen 
were in no way dependent on the tariff, but were the outcome of 
trade agreements and the like among persons engaged in the business. 

The data supplied by the Tariff Board support the view always 
entertained by critics of the present tariff that the reverse of this 
condition is the fact. No facts have been adduced to show that the 
trade practices which bring about an increase of prices to the con¬ 
sumer prevail abroad, where the system of protective duties upon 
cotton cloths is lacking. They appear to be found solely in the 
United States, where such duties have rendered possible the mainte¬ 
nance of high prices. 

If the Tariff Board be correct in their statements with reference to 
the charges made by mills for the cloths which they supplied to job¬ 
bers, a reduction of duty would not affect the amount obtained by 
the producer in the least, but would operate to lower the charges 
for transferring goods from producer to consumer. In many lines 
of goods high rates of duty have been maintained in spite of lower 
costs of production. This, if anything, is an even stronger argument 
for the introduction of a lower schedule of rates than would be afforded 
by a state of things in which the high prices, rendered possible by the 
tariff, result solely to the benefit of the mill owners. The condition of 
affairs said by the Tariff Board to exist in the cotton industry with 
respect to jobbers’ and retailers’ prices is merely a special instance of 
what has been known to exist for a long time in many other protected 
industries. What has been said by the Tariff Board about the estab¬ 
lishment of jobbers’ and retailers’ prices in the United States at the 
present time is therefore equivalent merely to an admission that a 
tariff assists in the maintenance of retail rates and should be removed 
in order to reduce these rates to a fair basis of comparison with those 
of other countries. It is, therefore, not middlemen’s combinations or 
agreements that are to blame for the high prices on certain commodi¬ 
ties in which we have an unmistakable advantage, but the tariff duties 
which have enabled retailers to follow out a perfectly established and 
rigid system of high charges. 


38 


DUTIES ON COTTON MANUFACTURES. 


RECAPITULATION. 

To summarize, the Tariff Board’s report affords the committee no 
ground for changing the duties on manufactures of cotton fixed in the 
bill passed by the House on August 3,1911. The committee’s analysis 
of the board’s report shows: 

1. That the document has been prepared upon a basis quite differ¬ 
ent from that employed in the wool report, as the cotton report con¬ 
tains less costs on foreign goods and places a much larger reliance on 
foreign prices as a basis of comparison. 

2. That could the data as to prices employed by the board in making 
the comparisons between the United States and" foreign countries be 
accepted, it must be concluded that cotton goods can be sold on 
quite as low a basis in the United States as abroad. The apparent 
exception to this, according to the board, is found in the case of 
hosiery and knit goods, and for these goods quite inadequate data 
are presented. 

3. That the comparative data presented by the board do not cover 
the complete cotton schedule, but relate only to yarn, cloth, hosiery 
and knit goods, and to the cloth-finishing processes. No compara¬ 
tive data are presented for many of the items contained in para¬ 
graphs 5, 6, 7, 8, 9, 12, 13, 14, 15, and 16 of H. R. 25034 (see 
Appendix). So imperfect and fragmentary are the few comparative 
data presented that no safe conclusions can be drawn therefrom with 
regard to fixing tariff rates. It is impracticable to check the alleged 
findings of the Tariff Board or the results reached from an analysis 
of its imperfect data against the rates presented in H. R. 25034. 

4. That the bill H. R. 12812, now H. R. 25034, was not framed 
with any protective purpose in mind, but with the view only to rais¬ 
ing the maximum amount of revenue in keeping with a proper safe¬ 
guarding of the consumers’ interests. 

5. That so far as conclusions may be drawn from the Tariff Board’s 
report, it shows that the excessive tariff duties are exerting a pecu¬ 
liarly harmful effect in maintaining a system of unnecessarily high 
prices to the consumer in the United States. The immediate remedy 
for this condition of affairs is the reduction of the rates which have 
rendered possible this system of extortion. 

6. That the board reaches the conclusions of the Democratic Mem¬ 
bers of Congress in 1909 and since with reference to the Payne-Aldrich 
revision of the cotton schedule. 

REVENUE AND SUMMARY UNDER H. R. 25034. 

As the committee is resubmitting to the House the bill presented 
at the last session of Congress, with no change of basis or rates, no 
change in its revenue estimate is called for. In the following table is 
presented the computations furnished in the report whicn accom¬ 
panied H. R 12812 (H. Rept. 65, 62nd Cong., 1st sess.), together 
with the import statistics for 1911. 


Table 10. —Summary of imports and duties for the fiscal years 1910 and 1911, with estimated imports and duties for a 12-month period under H. It. 25034 . 


DUTIES ON COTTON MANUFACTURES. 


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1 Includes $60 free of duty. 
















































Table 10. —Summary of imports and duties for the fiscal years 1910 and 1911, with estimated imports and duties for a 12-month period under 

II. R. 25034 —Continued. 


40 


DUTIES ON COTTON MANUFACTURES. 


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Stockings, hose and half- 


DUTIES ON COTTON MANUFACTURES. 



7, 972,500.00 

691,800. 00 

1,914.000.00 

782,400.00 

751,100.00 

8 1,752,600.00 


39,163,800.00 


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41 


1 Includes $10 free of duty. 4 Includes $73 free of duty. 7 Includes $83 free of dutj\ 

2 Includes $45 free of duty. 5 Includes $36 free of duty. 8 Includes $141 free of duty. 

3 Included under paragraph 16. 6 Exclusive of articles provided in for paragraph 15, but which are included in the results for 1910 and 1911. 































































42 


DUTIES ON COTTON MANUFACTURES. 


As indicated in Table 10, the committee estimates that the duties 
during the first 12-month period under II. It. 25034 will amount to 
$10,599,000, which compares with $13,673,801 for 1910 and $12,359,032 
for 1911. It is believed by the committee that no actual loss in rev¬ 
enue will result from the enactment of H. R. 25034, but that the bill 
will produce probably as much as in 1910, while at the same time the 
burden resting upon the people owing to the cost of cotton clothing 
will be reduced by more than $80,000,000. 

THE FORM AND PHRASEOLOGY OF THE BILL. 

In framing the bill H. R. 25034 the purpose of the committee has 
been to conform as closely as possible to the phraseology of the act of 
1909, and to change the wording and classifications of Schedule I only 
where actually necessary to ehminate unsatisfactory provisions and 
unnecessary complexities. 

The bill is a special tariff bill and, if enacted, will be an independent 
act. It leaves undisturbed the administrative provisions of the act of 
1909. The warehouse provision (sec. 2) conforms to the correspond¬ 
ing provision of the act of 1909 (sec. 29), except that the provision for 
levying duties based on weight at the time of the entry of the mer¬ 
chandise is omitted, since the bill H. R. 25034 provides for no duties 
based on weight. Under this warehouse provision, as in the present 
act, articles in warehouse when the bill H. R. 25034 shall take effect, 
on which duties have not been paid, shall be subjected to duty when 
withdrawn as if they had been imported after the date of effectiveness 
of the act; but articles in warehouse on which duties have been paid 
and a permit of delivery issued shall be subject to the duties in force 
prior to the enactment of the new bill. 

Oscar W. Underwood, Chairman . 

Choice B. Randell. 

Francis Bltrton Harrison. 

William G. Brantley. 

Dorsey W. Shackleford. 

Claude Kitchin. 

Ollie M. James. 

Henry T. Rainey. 

Lincoln Dixon. 

William Hughes. 

Cordell Hull. 

W. S. Hammond. 

Andrew J. Peters. 

A. Mitchell Palmer. 


APPENDIX. 

TEXT OF H. R. 25034, WITH STATISTICAL AND OTHER COM¬ 
PARATIVE DATA. 


A BILL To reduce the duties on manufactures of cotton. 

Be it enacted by the Senate and House of Representatives of the United 
States of America in Congress assembled. That on and after the first 
day of January, nineteen hundred and thirteen, the articles hereinafter 
enumerated, described, and provided for shall, when imported from 
any foreign country into the United States or into any of its posses¬ 
sions (except the Philippine Islands and the islands of Guam and 
Tutuila), be subject to the payment of duties at the rates hereinafter 
provided; that is to say: 

1. On cotton thread and carded yarn, combed yarn, warps or warp 
yarn, whether on beams or in bundles, skeins, or cops, or in any other 
form, except spool thread of cotton, crochet, darning, and embroidery 
cottons, hereinafter provided for, on all numbers up to and including 
number fifty, ten per centum ad valorem; on all numbers above 
number fifty and up to and including number one hundred, fifteen per 
centum ad valorem; on all numbers above number one hundred, 
twenty per centum ad valorem. On cotton card laps, roping, sliver, 
or roving, ten per centum ad valorem. On cotton waste and flocks, 
manufactured or otherwise advanced in value, five per centum ad 
valorem. 


Item. 

Imports under act of 1909. 

Estimated re¬ 
sults for a 12- 
month period 
under H. R. 

25034. 

1911 

1910 

Imports . 

$4,209,444.95 
$1,286,079.57 
30.55 

$4,295,502.24 

$1,381,854.48 

32.17 

$5,044,900.00 

$711,800.00 

14.11 

Duties . 

Equivalent ad valorem rate.per cent.. 

Bill. 

Rate. 

Wilson: 

As passed House . 

20 to 40 per cent, according to value. 

3 cents to 15 cents per pound and 45 per cent, 
according to class and value (equivalent aa 
valorem, 37.85 per cent). 

35 and 40 per cent, according to class and value. 

8 cents to 35 cents per pound and 40 per cent ad 
valorem (equivalent ad valorem, 35.63 per 
cent). 

A ^ pnap.fp.d . 


Morrison...-.. 



43 























44 


DUTIES ON COTTON MANUFACTURES. 


2. On spool thread of cotton, crochet, darning, and embroidery 
cottons, on spools, reels, or balls, or in skeins, cones, or tubes, or in 
any other form, fifteen per centum ad valorem. 


Item. 

Imports under act of 1909. 

Estimated re¬ 
sults for a 12- 
inonth period 
under H. R. 

25034. 

1911 

1910 

Imports... 

8717,439.79 

$175,005.48 

24.39 

$511,070.50 

$136,106.80 

26.63 

$712,200.00 

$106,800.00 

15.00 

Duties. 

Equivalent ad valorem rate.per cent_ 

Bill. 

Rate. 

Wilson: 

As passed House. 

4J cents per dozen (equivalent ad valorem, 43.50 
per cent). 

5J cents per dozen (equivalent ad valorem, 53.21 
per cent). 

40 per cent. 

6 cents per dozen (equivalent ad valorem, 45.08 
per cent). 

As enacted. 

Mills. 

Morrison. 



3. On cotton cloth, not bleached, dyed, colored, stained, painted, 
printed, or mercerized, containing yarn the highest number of which 
shall not exceed number fifty, fifteen per centum ad valorem; con¬ 
taining yarn the highest number of which shall exceed number fifty 
and shall not exceed number one hundred, twenty per centum ad 
valorem; containing yarn the highest number of which shall exceed 
number one hundred, twenty-five per centum ad valorem. On cotton 
cloth, when bleached, dyed, colored, stained, painted, printed, or 
mercerized, containing yarn the highest number of which shall not 
exceed number fifty, twenty per centum ad valorem; containing yarn 
the highest number of which shall exceed number fifty and shall not 
exceed number one hundred, twenty-five per centum ad valorem; 
containing yarn the highest number of which shall exceed number 
one hundred, thirty per centum ad valorem. 

(For comparative statistics, see paragraph 5.) 

4. The term cotton cloth, or cloth, wherever used in the paragraphs 
of this act, unless otherwise specially provided for, shall be held to 
include all woven fabrics of cotton, in the piece or cut in lengths, 
whether figured, fancy, or plain, and shall not include any article, 
finished or unfinished, made from cotton cloth. In the ascertain¬ 
ment of the value, upon which the duties imposed upon cotton cloth 
are made to depend, the entire fabric and all parts thereof shall be 
included. 

5. On cloth composed of cotton or other vegetable fiber and silk, 
whether known as silk-striped sleeve linings, silk stripes, or otherwise, 
of which cotton or other vegetable fiber is the component material of 
chief value, and on tracing cloth, thirty per centum ad valorem; on 
cotton cloth filled or coated, all oilcloths (except silk oilcloths and 
oilcloths for floors), and cotton window Hollands, twenty-five per 
centum ad valorem; on waterproof cloth composed of cotton or other 



















DUTIES ON COTTON MANUFACTURES. 45 

vegetable fiber, whether composed in part of india rubber or other¬ 
wise, twenty-five per centum ad valorem. 


Item. 

Imports under act of 1909. 

Estimated re¬ 
sults for a 12- 
month period 
under H. R. 

25034. 

1911 

1910 

Imports. 

i $9,686,853.28 
$4,196,804.72 
43.32 

$10,573,494.00 
$4,490,249.79 
42.46 

$13,931,600.00 

$3,414,300.00 

24.51 

Duties. 

Equivalent ad valorem rate.per cent.. 

Bill. 

Rate. 


Wilson: 

As passed House. 1 cent to 5f cents per square yard and 20 to 40 per 

cent, according to class and value (equivalent 
ad valorem, 38.01 per cent). 

As enacted... 1 cent to 6J cents per square yard and 25 to 40 per 

cent, according to class and value (equivalent 
ad valorem, 41.62 per cent). 

Mills. 40 per cent. 

Morrison..I 2 cents to 5 cents per square yard and 35 per cent, 

according to class and value (equivalent ad 
valorem, 27.61 per cent). 


1 Includes $60 free of duty. 


6. On all handkerchiefs or mufflers composed of cotton, whether 
in the piece or otherwise and whether finished or unfinished, thirty 
per centum ad valorem. 


Item. 

Imports under act of 1909. 

Estimated re¬ 
sults for a 12- 
month period 
under H. R. 

25034. 

1911 

1910 

Imports . 

$492,947.05 
$292,850.00 
59.41 

$453,182.05 

$267,655.03 

59.05 

$625,900.00 

S187.SOO.OO 

30.00 

Duties . 

Equivalent ad valorem rate.per cent.. 

Bill. 

Rate. 

Wilson: 

As passed House. 

40 per cent. 

Do. 

Not enumerated. 

40 per cent. 

As enacted . . ................ 

Mills . 

Morrison..-. 



7. On clothing, ready-made, and articles of wearing apparel of 
every description, composed of cotton or other vegetable fiber, or 
of which cotton or other vegetable fiber is the component material 
of chief value, made up or manufactured, wholly or in part, by the 
tailor, seamstress, or manufacturer, and not otherwise specially pro¬ 
vided for in this act, thirty per centum ad valorem; on shirt collars 
arid cuffs, of which cotton is the component material of chief value, 
twenty-five per centum ad valorem. 






















































46 


DUTIES ON COTTON MANUFACTURES. 


Item. 

Imports under act of 1909. 

Estimated re¬ 
sults for a 12- 
month period 
under H. R. 

25034. 

t 

1911 

1910 

Imports. 

i $1,931,156.53 
$966,448.33 
50.05 

2 $1,890,683.97 
. $945,722.13 

50.02 

$3,646,600.00 
$1,092,000.00 
30.00 and 25.00 

Duties. 

Equivalent ad valorem rate.per cent.. 

Bill. 

Rate. 

Wilson: 

As passed House. 

As enacted. 

Mills... 

Morrison. 

40 per cent. 

Do. 

Not enumerated. 

Not enumerated. Probably dutiable as manu¬ 
factures of cotton, n. s. p. f., at 35 percent. 


1 Includes $45 free of duty. 2 Includes $10 free of duty. 

8. On plushes, velvets, velveteens, corduroys, and all pile fabrics, 
cut or uncut, whether or not the pile covers the entire surface, any 
of the foregoing composed of cotton or other vegetable fiber, except 
flax, and on manufactures or articles in any form, including such 
as are commonly known as bias dress facings or skirt bindings, made 
or cut from plushes, velvets, velveteens, corduroys, or other pile 
fabrics composed of cotton or other vegetable fiber, thirty per centum 
ad valorem. 


Item. 

Imports under act of 1909. 

Estimated re¬ 
sults for a 12- 
month period 
under II. R. 

25034 

1911 

1910 

I mports. 

$1,814,815.00 
$959,212.03 
$0. 432 
52.85 

$523,620.65 
$284,510.41 
$0.420 
54.33 

$790,500.00 
$237, 200.00 

30.00 

Duties. 

Average unit of value.per square yard.. 

Equivalent ad valorem rate.per cent.. 

Bill. 

Rate. 

Wilson: 

As passed House. 

As enacted. 

Mills. 

Morrison. 

fNot bleached, dyed, colored, 35 percent. 
(Bleached, dyed, colored, 40 per cent. 

(Not bleached, dyed, colored, 40 per cent. 
(Bleached, dyed, colored, 47^ per cent. 

Not enumerated. 

Cotton velvet, 40 per cent; others probably duti¬ 
able as manufactures of cotton, n. s. p. f., at 35 
per cent. 


9. On curtains, table covers, and all articles manufactured of cot¬ 
ton chenille, or of which cotton chenille is the component material of 
chief value, tapestries, and other Jacquard figured upholstery goods, 
composed wholly or in chief value of cotton or other vegetable fiber, 
on any of the foregoing, in the piece or otherwise, thirty-five per 
centum ad valorem. 









































DUTIES ON COTTON MANUFACTURES. 


47 


Item. 

Imports under act of 1909. 

Estimated re¬ 
sults for a 12- 
month period 
under H. R. 

25034. 

1911 

1910 

Imports. 

$363,639.00 
$181,819.50 
50.00 

$235,138.00 
$117,569.00 
50.00 

$446,800.00 
$156,400.00 
35.00 

Duties. 

Ad valorem rate.per cent.. 

Bill. 

Rate. 

Wilson: 

As passed House. 

40 per cent. 

Do. 

Not enumerated. 

Not enumerated. Probably dutiable as manu¬ 
factures of cotton, n. s. p. f., at 35 per cent. 

As enacted. 

Mills. 

Morrison. 



10. On stockings, hose and half-hose, made on knitting machines 
or frames, composed of cotton or other vegetable fiber, and not other¬ 
wise specially provided for in this act, twenty per centum ad valorem. 


Item. 

Imports und 

1911 

er act of 1909. 

1910 

Estimated re¬ 
sults for a 12- 
month period 
under H. R. 

25034. 

Imports. 

$128,506. 85 
$38.552. 06 
$0.561 
30.00 

$78.383. 05 
$23,514.89 
$0.581 
30.00 

$100,900.00 
$20.200.00 

20.00 

Duties. 

Average unit of value.per dozen pairs.. 

Ad valorem rate.per cent.. 


BUI. 

Rate. 

Wilson: 

As passed House. 

30 per cent. 

Do. 

As enacted. 

Mills. 

Not enumerated. 

Morrison. 

35 per cent. 



11. On stockings, hose and half-hose, selvedged, fashioned, nar¬ 
rowed, or shaped wholly or in part by knitting machines or frames, 
or knit by hand, including such as are commercially known as seam¬ 
less stockings, hose and half-hose, and clocked stockings, hose and 
half-hose, on all of the above composed of cotton or other vegetable 
fiber, finished or unfinished, forty per centum ad valorem. On men’s 
and boys’ cotton gloves, knitted or woven, thirty-five per centum 
ad valorem. 


Item. 

Imports under act of 1909. 

Estimated re¬ 
sults for a 12- 
month period 
under H. R. 

25034. 

1911 

1910 

I m ports. 

$3,863,957.65 
$2,909,190. 72 
75. 29 

$6,059,663.64 
$4,336,858. 86 
71.57 

$7,972,5(H). 00 
$3,168,800.00 
40.00 and 35.00 

Duties . 

Equivalent ad valorem rate.per cent.. 































































48 


DUTIES ON COTTON MANUFACTURES. 


BUI. 

Rate. 

Wilson: 

As passed House. 

Stockings, 40 per cent. Gloves not enumerated; 
probably dutiable as manufactures of cotton, 
n. s. p. f., at 35 per cent. 

Stockings, 50 per cent. Gloves not enumerated; 
probably dutiable as manufactures of cotton, 
n. s. p. f., at 35 per cent. 

Not enumerated. 

As enacted. 

Mills. 

Morrison. 

40 per cent. 



12. On shirts and drawers, pants, vests, union suits, combination 
suits, tights, sweaters, corset covers^ and all underwear of every 
description, made wholly or in part on knitting machines or frames, 
or knit by hand, finished or unfinished, not including stockings, hose 
and half-hose, composed of cotton or other vegetable fiber, thirty 
per centum ad valorem. 


Item. 

Imports under act of 1909. 

Estimated re¬ 
sults for a 12- 
month period 
under H. R. 

25034. 

1911 

1910 

Imports. 

$433,942.00 
$261,112.25 
$3.39 
60.17 

$560,226.33 
$330,557.20 
$3.51 
59.00 

$691,800.00 

$207,600.00 

Duties. 

Average unit of value..per dozen. 

Equivalent ad valorem rate.'.per cent.. 

30.00 


BUI. 

Rate. 

Wilson: 

As passed House. 

Shirts and drawers, 30 per cent. Other articles 
probably dutiable as articles of wearing ap¬ 
parel, n. s. p. f., at 40 per cent. 

Knitted shirts and drawers, 50 per cent. Other 
articles probably dutiable as articles of wearing 
apparel, n. s. p. f., at 40 per cent. 

Not enumerated. 

As enacted... 

MUls. 

Morrison. 

Shirts and drawers and all goods made on knit¬ 
ting machines or frames, 35 per cent. Shirts 
and drawers fashioned, narrowed, or shaped on 
knitting machines or frames, 40 per cent. 
Other articles probably dutiable as manufac¬ 
tures of cotton, n. s. p. f., at 35 per cent. 



13. On bandings, beltings, bindings, bone casings, cords, garters, 
ribbons, tire fabric or fabric suitable for use in pneumatic tires, 
suspenders and braces, tapes, tubing, and webs or webbing, any of 
the foregoing made of cotton or other vegetable fiber, or of which 
cotton or other vegetable fiber is the component material of chief 
value, whether composed in part of india rubber or otherwise, and not 
embroidered by hand or machinery, spindle banding, woven, braided, 
or twisted lamp, stove, or candle wicking made of cotton or othei 
vegetable fiber, loom harness, healds, or collets made of cotton or other 
vegetable fiber, or of which cotton or other vegetable fiber is the com¬ 
ponent material of chief value, boot, shoe, and corset lacings made of 
cotton or other vegetable fiber, and labels, for garments or other 
articles, composed of cotton or other vegetable fiber, twenty-five per 
centum ad valorem; on belting for machinery made of cotton or other 
vegetable fiber and india rubber, or of which cotton or other vegetable 
fiber is the component material of chief value, fifteen per centum 
ad valorem. 



































DUTIES ON COTTON MANUFACTURES. 


49 


Item. 

Imports under act of 1909. 

Estimated re¬ 
sults for a 12- 
month period 
under H. R. 

25034. 

1911 

1910 

Imports. 

$701,568.60 

$248,143.20 

35.37 

$859,096.76 

$317,612.68 

36.97 

$1,914,000.00 
$386,900.00 
25. 00 and 15.00 

Duties. 

Equivalent ad valorem rate.per cent.. 

Bill. 


Rate. 

Wilson: 

As passed House. 

| 

35 per cent. 

45 per cent. 

30 per cent. 

35 per cent. 

As enacted. 

Mills. 

Morrison. 



14. On cotton table damask, and manufactures of cotton table 
damask, or of which cotton table damask is the component material 
of chief value, not specially provided for in this act, twenty-five per 
centum ad valorem. 


Item. 

Imports under act of 1909. 

Estimated re¬ 
sults for a 12- 
month period 
under H.R. 

25034. 

1911 

1910 

Imports. 

$434,802.50 

$173,921.00 

40.00 

$563,946.50 

$225,591.77 

40.00 

$782,400.00 
$195,600.00 
25.00 

Duties. 

Ad valorem rate.per cent.. 



Bill. 



Rate. 

Wilson: 

As passed House.. 

As enacted. 

Mills. 

Morrison. 



35 per cent. 

Do. 

Not enumerated. 
40 per cent. 



15. On towels, doilies, bath mats, quilts, blankets, polishing cloths, 
mop cloths, wash rags, sheets, and batting, any of the foregoing 
made of cotton, or of which cotton is the component material of 
chief value, twenty-five per centum ad valorem. 


Item. 

Imports under act of 1909. 

Estimated re¬ 
sults for a 12- 
month period 
under H. R. 

25034. 

1911 

1910 

Tmpnrfs._. 

8 

45.00 

0 

45.00 

$751,100.00 
$187,800.00 
25.00 

Duties. 

Ad valorem rate.per cent.. 


1 Included under paragraph 16. 


16. On all articles made from cotton cloth, whether finished or 
unfinished, and all manufactures of cotton or of which cotton is the 
component material of chief value, not specially provided for in this 
act, thirty per centum ad valorem. 

H. Rept. 829, 62-2-4 






















































50 


DUTIES ON COTTON MANUFACTURES. 


Item. 

Imports under act of 1909. 

Estimated re¬ 
sults for a 12- 
month period 
under II. R. 

25034. 

1911 

1910 

Imports . 

i $1,488,711.51 
$669,893.11 
45.00 

2 $1,813,433. 70 
$815,998.16 
45.00 

3 $1,752,600.00 
$525,800.00 
30.00 

Duties . 

Ad valorem rate.per cent.. 


1 Includes $36 free of duty. 

2 Includes $73 free of duty. 

s Exclusive of articles provided for in paragraph 15, but which are included in the results for 1910 and 
1911. 


Bill. 

Rate. 

Wilson: 

\ s passed House _ . 

35 per cent. 

Do. 

Not enumerated. 

35 per cent. 

As enacted . 

Mills . 

Morrison . 



Sec. 2. That on and after the day when this act shall go into effect 
all goods, wares, and merchandise previously imported and herein¬ 
before enumerated, described, and provided for, for which no entry 
has been made, and all such goods, wares, and merchandise previously 
entered without payment of duty and under bond for warehousing, 
transportation, or any other purpose, for which no permit of delivery 
to the importer or his agent has been issued, shall be subjected to no 
other duty upon the entry or withdrawal thereof than the duty which 
would be imposed if such goods, wares, or merchandise were imported 
on or after that date. 

Sec. 3. That all acts and parts of acts in conflict with the provi¬ 
sions of this act be, and the same are hereby, repealed. This act 
shall take effect and be in force on and after the first day of January, 
nineteen hundred and thirteen. 


Summary of statistics presented herein. 

Item. 

Imports under act of 1909. 

Estimated re¬ 
sults for a 12- 
month period 
under H. R. 

25034. 

1911 

1910 

Manufactures of cotton: 

Imports. 

1 $26,267, 784.71 
$12,359,031.97 
47.05 

2 $28,417,441.39 
$13,673,801.20 
48.12 

$39,163,800.00 

$10,599,000.00 

27.06 

Duties. 

Equivalent ad valorem rate.per cent.. 

Law. 

Average ad valorem rate on manufactures of 
cotton .3 

Wilson (1896). 

43.76 



1 Includes $141 free of duty. 

2 Includes $83 free of duty. 

3 Exclusive of laces, edgings, nettings, veilings, embroideries, carpets, etc., of cotton, as provided for ; n 
paragraphs 276 of Schedule J and 295 of Schedule K of the act of 1894. 

O 


LB JL ’12 





















































































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